Revenue and Customs Brief 1 (2017): VAT – historical bad debt relief claims has been published. The brief sets out HMRC’s policy on claims for historical bad debt relief on supplies made between 1 January 1978 and 19 March 1997 following the Court of Appeal’s decision in British Telecommunications and GMAC UK Plc.

This case concerned the bad debt relief legislation that existed between 1978 and 1997 and therefore has no impact on the current scheme set out in Notice 700/18 Relief from VAT on bad debts.

The Court of Appeal found that the conditions in the previous scheme were disproportionate. However, it also decided that it was too late to make claims under the scheme that existed before 1 April 1989.

The outcome of the litigation is, therefore, that:

• claims relating to bad debt relief on any supplies made prior to 1 April 1989 will be refused
• claims relating to supplies of goods made between 1 April 1989 and 19 March 1997 will be paid subject to satisfactory evidence that the bad debts occurred and that the VAT hasn’t been previously reclaimed.

More information is available in the brief which is outlined in full on here.