Bad debt relief for money lender

I have a client who is a money lender- licensed with the local authorities- some would say a loan shark- but there is a market out there- wonga.com!

if he lends some one £100 and charges £50 interest- the total to be repaid is £150.00-   if  the customer only pays him £100 back and  after six months does not pay any more- there is effectively a bad debt of £50- which the lender is never going to recieve-

my question is do we show the accounts as income of £50.00 ie the interest charged-  then show £50.00 as s bad debt write off!-  say other overheads come to £10- then we have a loss of £10!

our client had lent out lots of small amounts and there are lots of unpaid debts- that we wish to write off-  is this the correct way to show in the accounts?

 

if another loan was made of say £200.-  the interest say is £100- total to repay is £300-   if all this was paid then the income would be £100 - 

is there another way to show this.

 

thanks

 

Comments
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I would say that this is one

eastangliantaxadvisor |
eastangliantaxadvisor's picture

Thanks, yes this is a self

jamespounds |

Does..

IanRiley |

Licensed

davidwinch |
davidwinch's picture

-If he did buy- yes i guess

jamespounds |

Thanks very much- Yes the

jamespounds |

Year 2

davidwinch |
davidwinch's picture

Not my area of expertise but...

Democratus |
Democratus's picture

@Democratus

davidwinch |
davidwinch's picture

Yep - not my field

Democratus |
Democratus's picture

Allowability of the potential Bad Debt

RetiredTax |

Capital v trading losses

davidwinch |
davidwinch's picture

@David thanks

Democratus |
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