On 28 March 2017, HMRC published Revenue & Customs Brief 1/17, which sets out its policy concerning historical VAT bad debt relief claims, following the Court of Appeal’s judgments in British Telecommunications Plc1 and GMAC (UK) Plc2 .

The Brief confirms that claims for bad debt relief on pre-April 1989 supplies will be refused by HMRC. However, claims relating to bad debt relief on supplies between 1 April 1989 and 19 March 1997, will be paid subject to evidence that the bad debts occurred and the VAT has not been previously reclaimed.

If businesses cannot meet the evidential requirements then they will need to satisfy HMRC by other means that they did not previously obtain bad debt relief, but the onus is on the claimant business to show that it suffered the bad debt and that the amount claimed is correct.

A copy of the Brief is available to view here.