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HMRC internal manual

VAT Bad Debt Relief

Making a claim: How and when a claim is made


Claims for bad debt relief should be made on the VAT return for the accounting period in which the entitlement to make a claim arises. The amount claimed should be included in the input tax claim box.

If a business is operating the annual accounting scheme, it is possible to account for VAT on the supply made and claim bad debt relief on the same return, if all the conditions for relief are met by the end of the accounting period.

Claims for bad debt relief after deregistration are made on Form VAT427. Completed forms should be sent, together with original invoices, to:

HM Revenue and Customs

VAT3 (VAT27 Processing)