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HMRC internal manual

VAT Bad Debt Relief

From
HM Revenue & Customs
Updated
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Repayment of input tax: When is a business required to repay input tax?

There are two situations in which input tax is required to be repaid:

  • for supplies made before 1 January 2003 businesses are required to repay input tax relating to supplies for which they have not paid and for which a notification of a claim for bad debt relief is received from their supplier; and
  • for supplies made on or after 1 January 2003 businesses are required to repay input tax relating to supplies for which they have not paid six months after the ‘relevant date’.