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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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Left cash accounting scheme with bad debts - part of

Resolved Question:

left cash accounting scheme for vat with bad debts - part of year cash accounting - sa form now asks if used scheme - answer yes and no ....
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Are you still registered for VAT and still intend trading under the VAT umbrella?
Customer: replied 1 year ago.
Yes will be on accruals basis as invoices are much less so will probably be under VAT threshold anyway - had to leave vat paying what was owed and claiming bad debt relief
Now SA form asks you if you used cash basis which I have but have left
Customer: replied 1 year ago.
Bad debts need to be included on this form
Expert:  bigduckontax replied 1 year ago.
Well you did use the cash basis so you should annotate 'Yes.'
Customer: replied 1 year ago.
This does not allow bad debts as expense which vat system does on leaving scheme - this is inconsistent with VAT system
Expert:  bigduckontax replied 1 year ago.
Then leave the VAT system, particularly as your remaining venture will be below threshold. Then you will not have the palaver of VAT accounting to worry about.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your support. I am on 01750 725420.