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.
- Surprise visit from HMRC! 2,328 17
- Annual tax investigation cover fee? 133 3
- Stamp duty on multiple property transaction 252 15
- Capital Allowances and Building Improvements 293 9
- Cars Leased primarily for Taxi Hire 143 1
- VAT on digital streaming of my company's music? 149 2
- Can a sole-trader make pension contributions to avoid loss of personal allowance? 193 5
- Does this annoy anyone else ? 3,255 42
- Recharge for private use of a company car 134 2
- Bloomsbury Professional tax books 119 1
- IR35 - it it worth worrying about any more? 389 7
- Wear and tear allowance 454 10
- CIS deductions against the wrong UTR 200 6
- Residency test 202 4
- Alerting clients versus walking away from clients 250 3
- VAT Turnover 148 1
- HMRC - No Deadline to Respond? 149 1
- Recording fuel VAT adjustment in Sage 137 4
- Company purchase of shares 297 16
- Pension contributions and unused allowances 146 2
- Feedback on accounts production software for IFRS 691
- Auto enrolment excuses 679
- Add T&Cs to Sales Order in Sage 368
- Social investment tax relief 187
- Call Centre Data Costs 179
- Digita Hosted Software 179
- option to tax 163
- VAT on deposits 149
- Buying goods in US and selling them to company in US 138
- Director's loan account in credit 135