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Time limit for a Bad Debt Claim ?

Time limit for a Bad Debt Claim ?

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My client has advised that a debt created in 2004/05 has finally gone bad in 2010/11 when the client went into liquidation. The client knew the customer and therefore trusted him that the debt would be repaid and no relief for the debt has been claimed in the SA return. Is he now out of time due to the 4 year rule or does this sit outside that rule.

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By SJRUK
16th Feb 2012 15:20

I would still claim

"A deduction for a bad or doubtful debt is to be made in arriving at the profits of the year in which the debt becomes bad or doubtful."  as per BIM42701 

I would suggest the debt became bad in 2010/11 when the client went into liquidation.  It would seem that in 2004/05 it was probable he would still pay?

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