Tax Return : 2nd problem : An unhonored disbursement from previous tax year

[waynerrr]

Thanks for being so helpful in my 1st post

I now know how to deal with a disbursement on the tax return.

However could you please advise me how to deal with a disbursement that originates from february 2008.

This disbursement was never included in 2007/2008 accounts (probably a mistake, yes?)
because I wasn't sure how to deal with it (this was my very first Tax return)

But this disbursement was never honored. Its been 23 months and the company still hasn't paid up. So i regard this as "bad debt"

can I include this bad debt in my 2008/2009 return which i'm doing now.

If so how do I record it on the return (which box - short form)

THANK YOU

[elainec100@cheapaccounting]

So you haven't included it as a sale?

If you want to include as bad debt when you should have included as a sale in the first place.


The bad debt reduces the profit by the original sales value which was never paid.

So include in box

[MrPAYE]

Why are you asking the exact same questions here and in one of the main tax forums ?

I noticed this on the first question (to which you received many replies both here and in the other forum) but couldn't be bothered flagging this up.

To me, this type of posting indicates someone who clearly needs professional advice but is not willing to pay for it so seeks as many views as possible to hopefully get the right answer.

[yorkshirejames]

Agree with MrPAYE - if you can't answer all these issues from your own knowledge then you need to pay an advisor (it will save you time in the long run). You're looking at maybe £100-200.

[waynerrr]

thank you for your advise

I have posted a reply in a new thread called "beneficial or deceptive? Asking the same questions on another forum"

I'll return here later to add some more comments

[Jenni384]

Thanks for being so helpful in my 1st post

I now know how to deal with a disbursement on the tax return.

However could you please advise me how to deal with a disbursement that originates from february 2008.

This disbursement was never included in 2007/2008 accounts (probably a mistake, yes?)
because I wasn't sure how to deal with it (this was my very first Tax return)

But this disbursement was never honored. Its been 23 months and the company still hasn't paid up. So i regard this as "bad debt"

can I include this bad debt in my 2008/2009 return which i'm doing now.

If so how do I record it on the return (which box - short form)

THANK YOU

If you haven't recorded it as a sale in 2008 you can't record it as a bad debt expense in 2009.

For the sake of simplicity you could simply leave it out entirely. That isn't technically correct but it gives the same end result. Alternatively add the value of the disbursement to your turnover this year, and include the same amount as an expense against bad debts (if there's not a box for this then include in other business expenses, I can't remember off the top of my head). Again, not technically correct but same end result. It's really not worth the hassle of amending the 2007-08 return and just including the bad debt in 2008-09 which would give the same net result anyway.

[waynerrr]

Thank you - Appreciate it!