The Value Added Tax Regulations 1995

[F1Bad debt reliefU.K.

55V.—(1) This regulation applies where—

(a)a person has made a relevant supply,

(b)he has used the cash turnover method to determine the value of his relevant turnover for the prescribed accounting period in which the relevant supply was made,

(c)he has not accounted for and paid VAT on the supply,

(d)the whole or any part of the consideration for the supply has been written off in his accounts as a bad debt, and

(e)a period of 6 months (beginning with the date of the supply) has elapsed.

(2) Where this regulation applies—

(a)section 36 of the Act(1) (bad debts) and any regulations made thereunder shall apply as if the conditions set out in subsection (1) of that section are satisfied, and

(b)the amount of refund of VAT to which the person is entitled under that section shall be the VAT chargeable on the relevant supply described in paragraph (1) above less the flat-rate amount.

(3) In paragraph (2)(b) above, the flat-rate amount is—

where—

  • A is the appropriate percentage applicable for the prescribed accounting period, or part thereof, in which the relevant supply was made, and

  • B is the value of the relevant supply together with the VAT chargeable thereon.]

Textual Amendments