Annual company filing return and how to handle debt owed to me by a company now in administration

[Ian_Dobbin]

My annual HMRC/Company House return is due soon and I’ve been advised that the company, that has not paid three overdue invoices to my Ltd company, is now in administration. How do I treat this debt in my return knowing that I’m unlikely to receive any of it. Also, I have already paid the VAT on these invoices.

[Ian_Dobbin]

Anyone have a response please?

[QFMathew]

Hi @Ian_Dobbin

It may be best to ask your accountant to see how to handle this correctly.

Once you know how it should be handled, we can then advise on how to handle it in QuickFile.

Generally speaking, bad debts can be written off after 6 months

[Ian_Dobbin]

Thanks Mathew ……………. so as my annual return will be made within 6 months, my return will show the invoice values as revenue and thus I will pay Corp Tax on these and as stated, I’ve already paid the VAT upfront. Presumably, after 6 months I can then advise HMRC that I have overpaid CT and VAT and ask for a rebate?

[QFMathew]

Hi @Ian_Dobbin

I’m not an accountant so I wouldn’t be able to advise on how to handle this in regards to payments to HMRC. You would need to speak with your accountant I’m afraid.

[Ian_Dobbin]

Thanks for your help.

[Paul_Courtier]

After 6 months and you have written back the bad debt it will show in the p and l as an expense and will reduce your ct liability accordingly. So you will get the tax back that way.

As for the vat side of things I don’t know how QF handle it but I’d assume it will show as a vat refund in the return or if not then a vat adjustment can be made. Again this will claim the vat element back as well.