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HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
, see all updates

Old rules: loan relationships: authorised accounting methods: accruals basis: authorised arrangements for bad debt

Authorised arrangements for bad debt

This guidance applies to periods of account beginning before 1 January 2005

A creditor company following an authorised accruals method must assume that all amounts will be received in full and on time. But, under FA96/S85(3)(d), it must also ensure that it makes the proper adjustments as required by the authorised arrangements for bad debt.

These authorised arrangements are found in FA96/SCH9/PARA5, and they allow a departure from the assumption that all amounts will be received in full.

These arrangements do not apply to connected persons - see CFM81100+.