How do bad debts affect the VAT registration point? Or do they at all? Moot in this client's case as they won't exceed the threshold regardless, but it got me thinking.
Their turnover is (say) £80,000. However they had bad debt relief last year of £10,000, but they all suddenly paid, so now they have to include that as income (or is it a negative bad debt... eep I don't recall the last time I had a repaid bad debt...) for the year. But presumably the VAT turnover remains £80,000?
Or say their turnover was £90,000 and they identify bad debts of £10,000, are they required to register? Presumably so, as their turnover exceeds the threshold, the £10,000 relief being a debt. Which would then in turn mean the other scenario above would be a no, as that would be double counting.
I think I've talked it out and got my own answer there haven't I... But some agreement would be welcomed!