Bad debt relief allows businesses to recover VAT on unpaid invoices when customers fail to pay. This relief applies when invoices have been outstanding for more than six months and certain conditions are met. Traders can reclaim the VAT element of the debt, provided they have previously accounted for VAT on the original supply. The process involves submitting a claim to HMRC with supporting documentation showing the debt has been written off.
Source: HMRC (GOV.UK) – Read the original