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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...

    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...

    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....

    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...

    Can you separate a business for VAT purposes

    One of our subscribers wants to hive off a small part of his business to develop and ultimately sell. The main business is VAT registered, but will the registration continue to apply to the smaller business...

    Are you missing out on VAT bad debt relief?

    Your new bookkeeper has been looking over your records and says HMRC owes you VAT in respect of bad debt relief for overdue customer bills. This conflicts with advice you previously received....

    Bad debt or fraud - is there a difference for VAT?

    Despite vetting your account customers, one of them has done a runner leaving your invoices unpaid. Do the bad debt rules apply meaning you must wait to recover the VAT you’ve paid to HMRC...

    Are you holding onto VAT that’s not yours?

    If a customer doesn’t pay your bill you can get back any VAT on this that you’ve paid over to HMRC. But where do you stand if you’re withholding payment to a supplier because you’re in...

    Get your VAT back on debts

    It’s bad news if a customer can’t or won’t pay, and where you’ve already handed over VAT on the sale to the Taxman it adds insult to injury. Of course, you’ll get the VAT back if the...