Purchased Book Debt & Bad Debts

[VAT Queries]

Hi 

I was wondering if somebody would be so kind as to help on the following query…

If you purchase the Book Debt (Debtors Ledger) from another company and you have your own separate vat registration, can you claim back the bad debt vat on an any subsequent bad debts? 

thank you 

V

[Trevor S]

I don’t think you are entitled to claim bad debt relief. Bad debt relief can normally only be claimed by the person that made the supply and declared the original output tax. In your circumstances, the original supplier has received some payment for their supply (the amount that they received from you) – and you won’t have made any supply / output declaration to claim relief on.

The following extracts from HMRC’s manuals may help:
https://www.gov.uk/hmrc-internal-manuals/vat-bad-debt-relief/vbdr1800
https://www.gov.uk/hmrc-internal-manuals/vat-bad-debt-relief/vbdr1900

[VAT Queries]

Thank you Trevor – that is very helpful!!

[Author]

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