B
To be deductible an impairment loss (also known as a bad debt) must be incurred in the course of the business. This means that an irrecoverable trading debt will be deductible, whereas an irrecoverable...
The regime is, in practice, fairly straightforward as certain debits (expenses), credits (income) and gains recognised in the company accounts for qualifying intangible assets are also allowed...
Where a company prepares its accounts in accordance with an acceptable accounting method (¶7835), it is required to assess its financial assets at each balance sheet date and to see whether...
VAT is usually accounted for when a supply is made. If the debt in respect of a supply is not paid, the supplier may claim bad debt relief equivalent to the output tax paid to HMRC, provided...
Where the debts of a business are collected by an agent, VAT must be accounted for in the period in which the agent receives the payment. VAT is due on the full amount received by the agent from...
At the end of the VAT period the retailer should review the selling prices by taking into account: - price changes (particularly in respect of perishable goods that must be sold by a certain...
In addition to the VAT account, all traders must maintain the following records: - general business and accounting records; - copies of all VAT invoices issued and received; - a record of any...
Flow chart - VAT bad debt reliefIf you make supplies of goods or services to a customer but are not paid in full or in part, you may be able to claim a reduction in your VAT bill under the bad...
Relief for bad debtsIn these difficult times, anything you can do to reduce a looming tax bill will undoubtedly help your business with its cash flow. You are likely to see many more unpaid invoices than...
Using cash-based methodsSo far, this report has focused on how bad debts can be relieved for a business that uses traditional accruals-based accounting. Next, we look at how bad debts interact...