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VAT on Write Offs and Bad Debt Question

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My client is happy to write off some old customer amounts of around £300 for the last three years. 

When I put credits against the system shall I put them in with VAT?

And the other question is, we have a £5k bad debt, rather than showing in one year as a bad debt or writing off as above, can we put it as bad debt over two years, so maybe half in the year it happened as bad debt and this year as provisional? 

So I am clear, if we treat as bad debt thats the only way we can claim the vat against it with HMRC vat debt relief?

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By frankfx
30th Nov 2018 13:38

HMRC bad debt relief -- are you aware of the 6 month rule?
That should provide clarity.

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By frankfx
30th Nov 2018 13:47

Bad Debt £5000.?

https://www.bing.com/videos/search?q=monty+python+dead+parrot+sketch&vie...

Is it a dead parrot?

Open to debate, depends which side of the bookkeeping records or counter you view it.

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By lionofludesch
30th Nov 2018 13:53

If you only post the credit net of VAT, it won't clear the balance, will it ?

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Replying to lionofludesch:
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By andy.partridge
30th Nov 2018 14:00

Be funny if the supplies were zero rated.

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Replying to andy.partridge:
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By lionofludesch
30th Nov 2018 14:15

Oh yes - you're right.

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By Clare_K
30th Nov 2018 16:26

Ha Frankfx!!
Yes the 6 month rule does make sense but can I spilt it over 2 financial years so it doesn't look so bad?

And no the goods are mainly std vat but I didn't know to put as T1 or T9.

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By lionofludesch
30th Nov 2018 16:33

Clare_K wrote:

Ha Frankfx!!
Yes the 6 month rule does make sense but can I split it over 2 financial years so it doesn't look so bad?

No. If it's bad, it's bad.

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Replying to Clare_K:
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By andy.partridge
30th Nov 2018 16:49

Over two years? It's not a game.

You say 'mainly std vat'. What is and what isn't will determine how you account for the VAT. There's no short cut.

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By frankfx
30th Nov 2018 19:28

OP.

Do you recall the early days of the financial crash?

Northern Rock account holders queuing outside their branches.

The account holders did not believe that the £5,000 balance on their savings statement was for real.

They wanted CASH.

Lehman Bros. Investment bank...….. being ''allowed'' to fail. Barclays Bank landing like a vulture to gorge on the remains.

The genesis of this was similar to your thinking.

It is bad debt , worth £ zilch.
But let's present it to the outside world... looking in that It is worth £bns.
Why? 'cos it serves US to do so.
A Falsehood masked from view.

Consequence:

The UK taxpayer has endured 10 years of austerity and more to come.

OP.

What influences and commercial practice and experience developed the mindset that it is seemingly okay to drip- feed the corpse of a bad debt into the accounts?

It is unreal.

How would you explain your thinking to a bank manager ?

Q. so when can we expect to see this £5,000 hit the bank account.

A . What ? This is not the type of trade debt that converts to cash.

Q. So why is it in your accounts?

A. Well , to tell the truth , to pull the wool over your eyes.

The following video may help. Essential viewing.

https://www.bing.com/videos/search?q=bird+and+fortune+youtube&view=detai...

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By Clare_K
03rd Dec 2018 09:18

Wow thanks that's simply put I need to be harsh and tell them we need to put it all through in that year.

And Andy yes mainly std vat, its printing so some things have no vat and some are std - but don't worry I will check with the original invoice in each case.

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