Generally, users of the flat-rate scheme can claim bad debt refunds in the same way as other persons. There are some variations according to the way the users of the flat-rate scheme calculate their turnover.

Basic turnover method

Subject to complying with the general conditions for obtaining bad debt refunds, persons using the basic turnover method may recover the VAT due on the supply rather than the amount that was paid under the flat-rate scheme.

Example: Flat-rate scheme and bad debts: basic turnover method

Whizzo supplies services and uses the flat-rate scheme (FRS). The relevant percentage for his type of business is, say, 13.5%. Whizzo uses the ‘basic turnover method’.

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