Bad Debt Write Off

Happy New Year to you.
I have a couple of bad debts to write off from customer accounts (brought forward from previous year). Would you confirm please the best way to treat these to be in line with HMRC requirements. Would it be best to issue a credit note direct to bad debt account? If so will the VAT automatically calculate to box 4 of the return “If you are entitled to claim Bad Debt Relief, you add the amount of VAT you are reclaiming to the amount of VAT you are reclaiming on your purchases (input tax) and put the total figure in Box 4 of your VAT Return.”
thank you

The process of writing off Bad Debt is automated in Quick File, to which end, a ‘Bad Debt’ control button appears on the invoice, once it becomes older than 6 months:


Is there a manual method of writing off bad debt? I have a couple of invoices that will not be paid and I prefer not to carry these across to the new financial year if possible.

You could move the issue date back on the invoice as such that at least 6 months has expired. This will then reveal the bad debt button. I understand 6 months is the statutory minima when writing off bad debt, which is why QF hides the button. You could probably run a journal to post to bad debt prematurely but you’d probably need to run that by your accountant.

You may find the posting below useful, this posting shows a workaround that used before developing the ‘Bad Debt’ procedure on Quick File:


Can we see this post as waiting 6 months will take it to next financial year and for a service, the bad debt unlikely to be reversed. Can issue a credit note but that does not reflect the true situation

You can’t decide to shortern a bad debt period. It has to remain unpaid for up to 6 months. It doesn’t matter if it stretches over a year end.

What is the accounting standard which relates to this? As it doesn’t make sense to me to carry receivables which are not going to be collected. Have tried to Google but not able to find and our software is QF

You may find it best to speak to your accountant about this to make sure that you are processing it all correctly

The original question is about not seeing the bed debt button before 6 months, and what is the accounting standard that Quickfile use,that says businesses need to wait for 6 months.

I will journal it for now till I hear from you for future bad debts

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