refusing pay

WestonDave

keystone wrote: »

It would be quite wrong to punish all other clients for the activities of one or two rogues IMO. I'm guessing you issued an invoice and took it as revenue anyway in your accounts? That way you can take your "bad debts" into consideration for tax purposes when doing your returns.

Cheers

Sorry - run that one past me again!

If he issues an invoice for £100 but it doesn't get paid, he would have taxable profits of £100 less bad debt relief of £100 so no tax to pay on that invoice - however if it had been paid he would have been left with say £75 after tax and NI - its that £75 that he needs to feed his kids. Bad Debt relief is simply a means of businesses only being taxed on genuine income rather than hoped for invoicing! In order to ensure he still has the £75 he has to raise his other prices to take account of free loading types that don't pay.

keystone

WestonDave wrote: »

Sorry - run that one past me again!

If he issues an invoice for £100 but it doesn't get paid, he would have taxable profits of £100 less bad debt relief of £100 so no tax to pay on that invoice - however if it had been paid he would have been left with say £75 after tax and NI - its that £75 that he needs to feed his kids. Bad Debt relief is simply a means of businesses only being taxed on genuine income rather than hoped for invoicing! In order to ensure he still has the £75 he has to raise his other prices to take account of free loading types that don't pay.

Sorry - run that one past me again!

Where did I say that he could write the whole lot off? I said "take into consideration". I'm fully aware there's a difference between revenue and cash income.

Cheers

Wannabedebtfree

If the police called you I am assuming its either a break in or the Police put the door in. If its the first then insurance companies will pay but you need confirmation first. If the police put the door in they are liable

aah

Police are your client - they should not be taking food from your childrens plate

1984ReturnsForReal_2

JW_Builders wrote: »

A exter 7% on all bills to pay for the small amount who refused to pay......
Who ends up paying then. .... the insurance company who do pay........... who pays them ?

Its called business.

Welcome to the World of Business.

These are you business choices (repeated)

1) Factor in the cost of non payments in all invoices.

2) Recover your money through the courts

3) Get your money paid upfront

1984ReturnsForReal_2

keystone wrote: »

It would be quite wrong to punish all other clients for the activities of one or two rogues IMO.
Cheers

All businesses factor these "costs" into charge rates.

mikey72

Who put the door in?
Sounds like the police should have advised the cost up front, or you should have.

1984ReturnsForReal_2

mikey72 wrote: »

Who put the door in?
Sounds like the police should have advised the cost up front, or you should have.

I have a feeling they get calls by the police on the basis its not the police instructing & the police cant be held responsible for nonpayment & have nothing to do with the "deal".

Funny thing is that I bet he doesnt have to pay for the police referals.

27col

I sympathise with your problem JW. But how does the refusal to pay in this case, differ from any other case if the customer refused to pay. What would you have done, if in the normal course of you work someone refused to pay, or has it not happened to you yet. Going to law is going to put you seriously out of pocket with no guarantee of getting your money at the end of it, I would have thought.
Perhaps you should go round and remove the door again. As someone has said, if the police took the door off it's hinges then maybe they should pay.

keystone

1984ReturnsForReal wrote: »

All businesses factor these "costs" into charge rates.

Agreed. But its not the costs of debt recovery - these are part of overheads - that he is talking about. I have the impression its loading his rates with the sum of unpaid invoices. That would be unfair and thats what I meant.

Of course I could be wrong about my impression.

Cheers