Commentary

V7.481 When should bad debt relief not be claimed?

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.481 When should bad debt relief not be claimed?

Part V7 Tax planning | Commentary

V7.481 When should bad debt relief not be claimed?

Bad debt relief should not be claimed in situations where there is a genuine mistake or an overcharge, or an agreed reduction in the value of the supply. In these situations the solution is to issue a credit note.

Example 11

The same scenario as Example 5 except that John's engagement letter made no reference to VAT and the client understood that the £600 fee that was agreed was the amount that he would be required to pay. The client has a valid point.

The solution for John is to issue a credit note

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