Value Added Tax Act 1994 Schedule 13 para 9

Bad debt relief

Schedule 13, paragraph 9 sets out transitional restrictions on when a business may claim bad debt relief under section 36 of the VAT Act 1994.

• Bad debt relief allows a business to reclaim VAT already paid to HMRC where a customer fails to pay for a supply
• No bad debt relief claim may be made under section 36 for any supply that took place before 1 April 1989
• No bad debt relief claim may be made under section 36 where a claim for the same supply has already been made (or is being made) under the earlier section 22 of the Value Added Tax Act 1983
• These restrictions act as transitional provisions ensuring that the old and new bad debt relief schemes do not overlap