Hi Martin and Theresa
In a real life situ, be careful with the sign writing capitalisation.
For instance I have a sole trader client who, although he purchases a new van, the sign writing is not done on the same day and he has it redone once a year, therefore it is an expense and not part of the van for cap allow.
The reclaiming of vat on bad debt is because when you invoice a customer you include VAT. The VAT is then paid to the HMRC as part of the quarter's vat due on sales. This is regardless of whether the customer pays or not. (different for cash VAT accounting). So you have paid out to the HMRC but have not received the money from the customer, therefore as the debt becomes bad debt you can reclaim (after 6 months). Unfair if you are paying out to HMRC and not receiveing money for it if you see what I mean.
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