Bad Debt VAT Relief Calculator
Work out how much VAT you can reclaim from HMRC on invoices your clients have not paid. For UK VAT-registered businesses.
The 6-month clock starts from the later of the due date or the date of supply.
HMRC requires the debt to be written off in your VAT account and day-to-day accounts before you can claim relief.
Enter an invoice amount and due date to calculate.
This calculator is for guidance only. Consult your accountant before making a claim. HMRC has specific record-keeping requirements for bad debt relief claims.
What is bad debt VAT relief?
If you are VAT-registered and a customer does not pay an invoice, you may have already paid the VAT on that invoice to HMRC through your VAT return. Bad debt relief lets you reclaim that VAT.
Under HMRC VAT Notice 700/18, you can claim relief when an invoice remains unpaid for 6 months or more after the later of the due date or the date of supply. The debt must be written off in your accounts, and you must have already accounted for and paid the VAT to HMRC.
The relief is claimed on your VAT return by entering the VAT amount in Box 4 (VAT reclaimed on purchases and other inputs). You must keep records showing the original invoice, the amount written off, and the date the debt became 6 months old.
Conditions for claiming bad debt relief
| Requirement | Detail |
|---|---|
| VAT invoice issued | You must have issued a valid VAT invoice for the supply |
| VAT paid to HMRC | The output VAT must have been accounted for and paid on a previous return |
| 6 months overdue | At least 6 months must have passed since the later of the due date or date of supply |
| Debt written off | The debt must be written off in your day-to-day VAT accounts |
| Claim within 4 years 6 months | You must claim within 4 years and 6 months of the later of the due date or date of supply |
Can I still chase the debt after claiming relief?
Yes. Claiming bad debt relief does not mean you have given up on the debt. You can and should continue to pursue payment from your client. However, if the client does later pay (in full or in part), you must repay the corresponding VAT relief to HMRC on your next VAT return.
This is important: the relief is not a permanent write-off for VAT purposes. It is a way to get your cash flow back while the debt remains unpaid. If any payment is received afterwards, the VAT element of that payment must go back to HMRC.
How to claim on your VAT return
Include the VAT amount in Box 4 of your VAT return (VAT reclaimed in this period on purchases and other inputs). You do not need to write to HMRC separately or submit a separate claim form. Keep full records in case of an enquiry: the original VAT invoice, proof the VAT was paid to HMRC, evidence the debt has been written off, and the date the 6-month period expired.
Related tools and guides
This calculator is for guidance only and does not constitute tax or legal advice. Source: GOV.UK: Claim a refund of VAT on bad debts
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