What is the significance of the Bad Debt marker available on invoices. What exactly happens in the accounting (sales, VAT) when an invoice is marked as a bad debt?
I don’t see any documentation in the Knowledge Base describing this.
Thanks
My understanding is that it will credit the unpaid value off the debtors control account, debit the net to bad debt write off and debit the vat to the sales tax control account.
If you’re on accrual accounting and you’ve already paid the VAT to HMRC then it should get recovered on your next return. If you’re on cash accounting then there’s nothing to recover as you would only have paid the vat after the customer paid you.
This topic was automatically closed 14 days after the last reply. New replies are no longer allowed.