SageForum for UK versions of Sage 50- Help and support.

Hi,

We have had a customer go out of business still owing us money. We no have to write this bad debt off. I know that you can go into Write Off / Refund in the Customer screen but it says that nothing is done with that VAT.

How or what do we do concerning to VAT so that we can claim it back?

Regards

Jo

How old is the bad debt - I believe that you have to wait 6 months before the VAT can be reclaimed. Assuming it is older that 6 months, raise a credit note on the Customer Account to the Bad Debt nominal code (8200 by default) with the relevant net and tax amounts and tax code.

Then, go to Bank -> Customer, select the customer and both the invoice and credit note will appear - select Pay In Full for both and they will be allocated to one another.

John

Bear in mind that if cash accounting is involved, vat will not have been accounted for anyway so doesn't need reclaiming.