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    Value added tax - Routine VAT - Bad debts - 81360

    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...

    Value added tax - Routine VAT - Cash accounting scheme - Special situations - Outsourcing debt collection - 81615

    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...

    Value added tax - Special accounting methods - Retail schemes - Using a retail scheme - Calculation elements - Expected selling price - 83520

    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 which must be sold by a certain...

    Value added tax - Administration - Records - Other records - 87060

    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...

    When should you deduct bad debts?

    Your firm’s financial year ends soon and while the accounts will show a profit you’re expecting them to include significant bad debts. How long will you have to wait to claim a tax deduction...

    VAT flat rate scheme users missing out on bad debt relief

    If a customer fails to pay your invoice you can, after six months, claim a refund of the corresponding VAT you accounted for to HMRC. But if you use the flat rate scheme a further adjustment...

    Is bad debt relief due on employee theft?

    Is bad debt relief due on employee theft?..Dishonesty. In the case of Total Catering Equipment Ltd v HMRC [2019] TC07184 (see Follow up ), the company (T) was a victim of an employee’s fraudulent behaviour....

    Pros and cons of the cash accounting scheme

    The cash accounting scheme is open to small businesses, but when your turnover increases you may need to leave. This can lead to some tricky VAT and accounting issues. What are they and how should you...

    Claiming bad debt relief

    Bad debts are a commercial reality for many businesses. What do you need to do to ensure that your clients are not out of pocket as far as VAT is concerned when they incur a bad debt?

    Repaying input tax to avoid a penalty

    Usually you can reclaim VAT on purchases for the VAT quarter in which you receive the goods or services, even if you don’t pay for them. However, if you delay paying the supplier’s bill you...