Commentary

V7.470 Bad debt relief—introduction

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.470 Bad debt relief—introduction

Part V7 Tax planning | Commentary

Bad debt relief

V7.470 Bad debt relief—introduction

A basic principle of VAT is that it is a tax that is borne by the ultimate consumer and should not be a cost for VAT-registered businesses in the supply chain. The reality is that complying with the VAT legislation is a cost for every VAT-registered business and some VAT-registered businesses cannot fully recover VAT (see V7.224–V7.232A for businesses using the flat rate scheme and V7.342–V7.355 and V7.356–V7.364 for businesses making exempt supplies).

This section deals with the subject of VAT bad debt relief, a relief which is consistent with the basic principle

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