»Ê¹ÚÌåÓýapp

VAT bad debt relief was first introduced on 1 October 1978. From its inception, up until 1 April 1989 businesses could only claim relief if their customer had been declared formally insolvent. This is no longer the case and for supplies made from 1 April 1989 businesses can claim relief after the debt has remained unpaid for six months from the appropriate date, providing all the other conditions for the relief are met. »Ê¹ÚÌåÓýapp old scheme was withdrawn by virtue of Section 39(5) of the Finance Act 1997.

Bad debt relief allows a business to claim a refund of the output tax they have paid to HMRC when they do not receive payment from their customers. A refund can only be claimed when all the conditions have been met and must be repaid if the claimant subsequently receives payment from their customer. »Ê¹ÚÌåÓýapp relief is two-sided, in that the recipient of the supplies which have not been paid for is required to repay input tax claimed.