The decision of the Upper Tribunal in GMAC and BT leaves open the potential to make retrospective VAT bad debt relief claims covering a substantial period of time.
For most claiming VAT bad debt relief (BDR) that is obtaining a refund of VAT where a customer does not pay seems easy now. The supplier waits six months and if the customer hasn’t paid then the VAT is refundable. The process for claiming BDR wasn’t always so simple though and this has caused taxpayers to question whether the rules were too stringent in the past. This is of interest now because there is also doubt about whether the periods covered by these rules are subject to any capping provisions; if not there may be an opportunity for substantial retrospective reclaims.
The issue has been moved forward most recently by a decision in the litigation between GMAC...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, 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 article in full.
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
Home >Articles > Temporary relief for VAT on bad debts
Temporary relief for VAT on bad debts
The decision of the Upper Tribunal in GMAC and BT leaves open the potential to make retrospective VAT bad debt relief claims covering a substantial period of time.
For most claiming VAT bad debt relief (BDR) that is obtaining a refund of VAT where a customer does not pay seems easy now. The supplier waits six months and if the customer hasn’t paid then the VAT is refundable. The process for claiming BDR wasn’t always so simple though and this has caused taxpayers to question whether the rules were too stringent in the past. This is of interest now because there is also doubt about whether the periods covered by these rules are subject to any capping provisions; if not there may be an opportunity for substantial retrospective reclaims.
The issue has been moved forward most recently by a decision in the litigation between GMAC...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
