Commentary

B5.641 Hire-purchase trading—bad debts

Business tax
Business tax | Commentary

B5.641 Hire-purchase trading—bad debts

Business tax | Commentary

B5.641 Hire-purchase trading—bad debts

A bad debt in a hire-purchase business arises through the default on the part of a hirer to pay the instalments due under the hire-purchase agreement, in which case the article, the subject of the agreement, may be taken back or 'seized' by the hire purchase concern. If the hire-purchase trader follows the preferred HMRC method (see B5.640) the reserve, which is calculated on all unpaid instalments, will include amounts in an existing bad debts reserve. It is therefore necessary to bring back (credit) into the profit and loss account any bad debts reserve. If the

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial