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HMRC internal manual

VAT Bad Debt Relief

Repayment of input tax: How much input tax should be repaid?

The amount of input tax to be repaid is calculated in the following way:

  • Input tax originally deducted
  • x unpaid consideration (gross amount) at the end of the relevant period
  • ÷ total consideration for the supply.
     An example of the calculation is shown in

Notice 700/18 Relief from VAT on bad debts.