Tax Return Bad Debts?

bowlingo

Hi all,

Im just preparing my accounts for my accountant for 2010 - 2011. In August 2010 I got stung for £4588.54 by Connaught when they went into receivership. Normally I get around £1000.00 on each tax return as a rebate due to paying 20% CIS on everything I earn. I am wondering if someone can explain how the bad debts will benefit me?..my accountant goes on holiday on Monday for 2 weeks so I cant give him a ring.

Thanks

antrobus

bowlingo wrote: »

Hi all,

Im just preparing my accounts for my accountant for 2010 - 2011. In August 2010 I got stung for £4588.54 by Connaught when they went into receivership. Normally I get around £1000.00 on each tax return as a rebate due to paying 20% CIS on everything I earn. I am wondering if someone can explain how the bad debts will benefit me?..my accountant goes on holiday on Monday for 2 weeks so I cant give him a ring.

Thanks

To be honest, the bad debt will not benefit you at all; it's just income that you thought you'd earnt but hadn't. In your accounts it would be normal to include the value of the unpaid invoice due from Connaught as part of your income, but also include it as an expense - thus cancelling each other out.