Hi, I have a question regarding old debt.
We have a number of outstanding invoices which we issued to our clients that we finally wish to write off as bad debt.
In the previous period these were declared as debt.
How should we declare them in this period?
They come from several previous periods and each has its own story.
They were in our list of invoices and they were added to the company's turnover. As an asset they were declared within the debtors field (AC52 in the CT600).
This year we need to write them off and we are not sure how to do this in the CT600.
The CT600 we have includes the accounts section. Where should it go in there? Do we exclude it from debtors (AC52) and/or include it in expenses (AC20)?
I would like to add some background to this question.
As we have a number of outstanding invoices that clients refused to pay or they are bankrupt we would like to remove this from the balance sheet and also lower our tax bill (CT) for this current year.
The nature of the question is technical.
Where in the 'accounts' section of the CT600 do we add these figures and where (if) we need to add these figures in the 'CT600' section so we can lower our tax bill. I need specific fields such as AC123 etc.
As my question has not been answered please see below.
As we issued a number of outstanding invoices(all of which are from previous periods and are included in the debtors field of of previous submissions[AC52]) that clients disputed and did not pay or they are bankrupt we would like to remove this from the balance sheet and also lower our tax bill (CT).
The nature of the question is somewhat technical.
I hope this is helpful and answers your question.
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If we do that, will it not have a double effect? By adding to our expenses and also reducing the amount of debtors it seems like the total assets will be reduced by double the amount of bad debt.
Thank you for the prompt and clear replies
Thank you....Please don't respond to this posting.
it is for information only.Many thanks