VAT bad debt relief allows a business to reclaim VAT already paid over to HMRC on sales invoices that the customer never pays.
Conditions for claiming
The debt must be more than six months but less than four years and six months old, written off in the business's accounts, and the VAT must already have been accounted for and paid to HMRC on the original supply.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.