A refund for a bad debt is claimable under VATA 1994, s. 36 for supplies which meet all the following conditions:

1the sales invoice is over due for ‘payment’ by at least six months from the later of:

1the due date for payment for the supply (VATA 1994, s. 36(1)(a), Value Added Tax Regulations 1995 (SI 1995/2518), reg. 165A(1) and (2) and 172; Notice 700/18 and HMRC Bad Debt Relief Manual); and

2the tax point (VATA 1994, s. 36(1)(c)).

For example, if a VAT invoice is dated 31 January and is due to be paid within 60 days, a claim for the refund may be made on the VAT return that includes 30 September of the same calendar year.

‘Payment’ includes:

Need help? Get subscribed!

To subscribe to this content, simply call 0800 231 5199

We can create a package that’s catered to your individual needs.

Or book a demo to see this product in action.