Cash basis return for bad debts
I may have a new accounting client who has not done her 2010/2011, or 2011/2012 tax return. Tut tut.
In 2010/2011, they invoiced their client (april to dec) a total of £50K. During the year they only received £20K of it. No payments received against this debt in 2011/2012 and in 2012/2013 the company is potentially putting this debt into a CVA.
Now - we need to play catch up with the 2010/2011 tax return which will show income of £50K and potentially the 2011/2012 will show a bad debt cost of £30K. It seems unfair to have to pay tax on money never received.
So my question then is, could my client do the 2010/2011 tax return on a cash received basis, and if she ever receives any payment on the rest of the income, declare that in the tax year of receipt?
Thank in advance.
- VAT with Russia 154 2
- Tax on LLP members drawings not covered by future profits 424 17
- Business only use of company car 628 25
- valuation of vehicles 332 15
- VAT FRS percentage for sales person? 223 4
- Money Laundering Manual 276 11
- cgt quoted shares losses 222 2
- Ethical Issues / Conflict of Interest 85 1
- Is there no lower level to the work a lawyer would take on. 857 28
- Scientist switch to accountancy - work experience? 1,071 29
- directors loan 286 8
- Director registration for SA question 290 11
- How do you pay Inheritance Tax when HMRC haven't demanded it 241 3
- New Company reviews please 479 12
- Holiday pay calculator for client use? 352 4
- CIS not deducted 329 5
- Car Capital Contribution 184 2
- LLP and corporate members - timing differences impact on corp tax 107 2
- As I was saying, Its VAT question day 364 8
- Penalties for late PAYE scheme 230 2
- RTI Rollback to delete incorrect data 286
- Vouchedfor.co.uk 237
- Motor Traders Assistant Bookkeeping Programme queries 235
- Tracesmart/Lexis Nexis AML software? Any opinions? 212
- Any thoughts on Capium? 206
- Expenses Software 189
- auto enrolment 180
- Sage Compatible P60's Self Seal 171
- Continuity of practice-ACCA 148
- How to account for investment in JV? 147