Bad Debt - VAT problem
Discussion
Okey dokey, quick question. (Almost definitely for Eric
)
I invoiced a company back in May and they have no intention on paying (its complicated). I do, however, have to complete a vat return for period ending July 06 and I have a choice, either issue a credit note/error in invoicing or pay the vat and claim it back in six months as a bad debt. I don’t mind paying the vat as I really, really don’t want to give them the satisfaction of getting off likely.
Anyone had any experience 
) I invoiced a company back in May and they have no intention on paying (its complicated). I do, however, have to complete a vat return for period ending July 06 and I have a choice, either issue a credit note/error in invoicing or pay the vat and claim it back in six months as a bad debt. I don’t mind paying the vat as I really, really don’t want to give them the satisfaction of getting off likely.
Anyone had any experience 
That constitutes fraud and would be extremely annoying to Mr VAT man - especially when there is no need for it.
When was the invoice isued and when did it become "bad"?
You have to wait six months (two VAT periods) from the date of the "writing off" of the debt before you can reclaim the VAT on said invoice.
Once that time period has expired, you can make your claim without any need for tricks.
Don't forget, the VAT bad debt claim is not made by reducing the Output VAT on Sales but by increasing the Input VAT on your costs.
When was the invoice isued and when did it become "bad"?
You have to wait six months (two VAT periods) from the date of the "writing off" of the debt before you can reclaim the VAT on said invoice.
Once that time period has expired, you can make your claim without any need for tricks.
Don't forget, the VAT bad debt claim is not made by reducing the Output VAT on Sales but by increasing the Input VAT on your costs.
Eric Mc said:
That constitutes fraud and would be extremely annoying to Mr VAT man - especially when there is no need for it.
When was the invoice isued and when did it become "bad"?
You have to wait six months (two VAT periods) from the date of the "writing off" of the debt before you can reclaim the VAT on said invoice.
Once that time period has expired, you can make your claim without any need for tricks.
Don't forget, the VAT bad debt claim is not made by reducing the Output VAT on Sales but by increasing the Input VAT on your costs.
When was the invoice isued and when did it become "bad"?
You have to wait six months (two VAT periods) from the date of the "writing off" of the debt before you can reclaim the VAT on said invoice.
Once that time period has expired, you can make your claim without any need for tricks.
Don't forget, the VAT bad debt claim is not made by reducing the Output VAT on Sales but by increasing the Input VAT on your costs.
Thanks Eric. Invoiced issued in May and came 'bad' in June.
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