Sage Claiming Vat on bad debts written off

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
Can someone please tell me how to claim VAT on bad debts written off.

I have used the tools write off refund .. which debits the gross amount to bad debts write off account.

I have tried using the the journal to transfer the VAT to be claimed. It does not show on the vat return. Is this correct?

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Sage Claiming Vat on bad debts written off

    If transferring the VAT total by journal, you will need to ensure the debit to the sales tax control account has the tax code "T1". This will ensure it is picked up in the VAT return.

    Regards
    Steve
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Sage Claiming Vat on bad debts written off

    Thanks once again Steve.Is it correct that the Vat being claimed is recorded in box 4 and 6? Surely when claiming the VAT it should only affect box 4.

    I have debited sales tax control and Credited bad debt write off account tax code T1. It has affected both boxes.

    Do you have any other advice please,

    Regards Rosemary
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Sage Claiming Vat on bad debts written off

    Hi Rosemary,

    Yes this is correct. Because the original gross debit went to the P&L account, you have credited the P&L with the amount of VAT and debited sales tax control, which is correct. The amount in box 6 is correcting the original amount which was the gross amount. So, in box 6 the gross amount is there, less the journal for the VAT to amount to the correct net amount.

    Kind regards
    Steve

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