How to treat an insurance pay out to a business

[Silverage]

I recently sent some stuff to a company which UPS have managed to lose. I've got a claim in on the insurance - my question is, does any payout include VAT?

[Silverage]

insurance_jon said:

If you are registered for vat then in general the policy will pay out ex vat with you reclaiming the vat yourself

Yes, we are registered for VAT. The payment is a fixed amount, a little less than the value of the lost goods, so I'll just treat it as being ex-VAT.