In Clear Books you can account for bad debt relief on invoices by using our write off feature. When an invoice is written off, the system creates a bad debt credit which will only appear on the VAT return 6 months after the invoice payment due date (and less than 4 years & 6 months). 


You can read more about bad debt relief on the HMRC site linked here.

Step 1. 


Head to Sales > Invoices > Unpaid and click on the invoice that you would like to claim bad debt relief for.


Step 2.


To the right of the Payment history table click on the Write off tab.


Step 3.


Select an Account, by default this will be Bad debt expense


Select a Date. The VAT return will pick up this bad debt based on the date you select here and only if the invoice it is allocated to has a a due date that is 6 months old (and less than 4 years & 6 months). 


For example, if the due date on the invoice is 31/03/2018 and you enter the date of the bad debt as 20/08/2019 (current date being 20/08/2019), the debt is over 6 months old (and less than 4 years & 6 months) and so is eligible. If you create a return which includes 08/2019, the bad debt will appear in box 4.


Finally, enter a Description and hit the Write off button.