Commentary

V7.483 Bad debt relief—what if I am the debtor?

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.483 Bad debt relief—what if I am the debtor?

Part V7 Tax planning | Commentary

V7.483 Bad debt relief—what if I am the debtor?

At the beginning of this section it was noted that 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.

Providing every business in the supply chain is making fully taxable supplies, the output tax for a supplier will be input tax for their business customer.

A situation can arise where a business customer claims input tax on an invoice which they do not pay and for which the supplier claims

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