Commentary

V21.137 Bad debts, tax credits, etc

Part V21 Climate change levy

V21.137 Bad debts, tax credits, etc

V21.137 Bad debts, tax credits, etc

Bad debt—entitlement to tax credit

A person is entitled to a tax credit for bad debts on the amount of CCL chargeable calculated by reference to the outstanding amount1. However, this only applies where2:

  1.  

    •     a person has supplied a taxable commodity and has accounted for and paid the CCL chargeable on the supply

  2.  

    •     that person and the recipient of the supply are not connected (see TA 1988, s 8393) or are not the same person

  3.  

    •     that person has issued to the recipient a CCLAD (or, if the issue of such a document is not required by or under the CCL rules, other invoice) relating to the supply showing the CCL chargeable

  4.  

    •     the whole or any part of the price for the supply has been written off in his accounts as a bad debt, and

  5.  

    •     the period of six months referred to below has elapsed

'The outstanding amount' refers to4:

  1.  

    •     if at the time of the claim no part of the price written off in the claimant's accounts as a bad debt has been received, an amount equal to the amount of the price so written off;

  2.  

    •     if at that time any part of the price so written off has been received, an amount by which that part is exceeded by the amount of the price written off.

In this context, 'received' refers to receipt either by the claimant or by a person to whom has been assigned a right

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