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Post Info TOPIC: VAT payment when customer goes into administration
Princess


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VAT payment when customer goes into administration
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One of my clients has just found out one of his customers has gone into administration before paying one of his invoices.  I'm about to do the VAT return but he doesn't want to pay the VAT on that invoice as he will only get a small proportion of it paid and that won't be for some time.  I haven't come across this before, is there any way he can avoid it?  What is the best process in this case?  Thanks.



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Leger


Master Book-keeper

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Hi Princess

If he's on VAT cash accounting he can, otherwise he will need to wait 6 months before claiming bad debt relief.  

https://www.gov.uk/government/publications/vat-notice-70018-relief-from-vat-on-bad-debts/vat-notice-70018-relief-from-vat-on-bad-debts



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Princess


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That's what I thought, I was just hoping for another way. Thanks.

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Cheshire


Master Book-keeper

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I can hear heads smacking on desks!

It's such a bummer isn't it!

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Princess


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I changed him over to cash accounting for VAT. Problem solved.

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