VAT bad debt relief and VAT deferral

The CIOT has raised questions with HMRC around VAT bad debt relief and the potential interaction with deferral of VAT payments. Where a business had both part paid and part deferred the VAT due in a VAT quarter falling in the deferral period (20 March to 30 June 2020), it will not have paid all the VAT due for that period. The business should claim VAT bad debt relief to the extent that the VAT on unpaid supplies has been paid to HMRC, by apportioning any VAT paid across all supplies made in the period and claiming the proportion of VAT that is applicable to the unpaid supplies.