Value Added Tax Act 1994 section 28

Bad debts

Section 28 explains how a participant in a special scheme can claim a VAT refund when a debt relating to a qualifying supply of goods treated as made in the United Kingdom is written off as bad.

• A participant in a special scheme who has already submitted a return to the administering member state's tax authorities may amend that return to reflect a bad debt write-off.
• The bad debt must relate to the whole or part of the consideration for a qualifying supply of goods treated as made in the United Kingdom.
• Amending the return in this way can be treated as making a formal claim to HMRC for a VAT refund under the bad debt relief provisions.
• This ensures that participants using the special scheme do not need to submit a separate claim to HMRC in order to obtain bad debt relief.