Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Gone bad

05 February 2008
Issue: 4144 / Categories: Forum & Feedback
Is VAT bad debt relief available for a trader who uses the flat rate scheme?

I was very interested in the reply to query T17 104 concerning the VAT treatment of refunds to customers under the flat rate scheme. I also have a problem on an aspect of the scheme in relation to bad debt relief.

I have a client who recently suffered a bad debt for £10 000 plus VAT. We never included the sale in the flat rate scheme calculation because my client adopts the cash basis for calculating his gross sales.

However I understand from a colleague that there may be some additional VAT that my client can claim in this situation as a special concession.

My client uses the 10% flat rate — so does that mean we can claim 10% of the gross invoice value as a special entry on his next VAT return?

Possibly in Box 4 of the return?...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon