Save content
Have you found this content useful? Use the button above to save it to your profile.

Incorrect use of VAT bad debt relief

15th Nov 2018
Save content
Have you found this content useful? Use the button above to save it to your profile.

In a rather messy case, not helped by inconsistent evidence, the FTT determined that a supply of goods HAD been made. It followed that, since payment had not been made, that VAT relief was only available under bad debt relief rules.

The taxpayer delivered the goods and raised invoices, showing around £50k of VAT. Upon hearing of their customers becoming insolvent, the supplier credited the invoices, rather than waiting for the 6 months had expired under the bad debt relief rules (Reg 165A).

The FTT also upheld a decision that to credit the invoices rather than use bad debt relief was ‘deliberate,’ so a penalty of 35% was applied.

http://financeandtax.decisions.tribunals.gov.uk//Aspx/view.aspx?id=10749

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.