United KingdomManual

The UK has a standard VAT rate and one reduced VAT rate. In addition, a number of items are zero rated

Bad debt relief in UK

UK has rather easy bad debt relief regime in comparison with other EU countries. VAT amounts that are not collected from the customer but have been paid as output VAT to the tax authorities can be recovered when:

a) Six months have passed since the issuance of the invoice and;

b) The debt was written off in the business accounts.

There are no additional formalities (e.g. no credit notes, corrective returns or letters to the authorities are not required). VAT on bad debt can be claimed directly in the next VAT return once the conditions have been met.

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