VAT back on invoices that were never paid
If you paid HMRC the VAT on a sale and your customer never paid you, you can usually claim that VAT back once the debt is 6 months old and written off.
Your answer
Enter the invoice total and how many months ago payment was due.
About this calculator
For VAT-registered businesses with a customer who hasn't paid an invoice you've already paid the VAT on.
What happens to your answers
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How it’s worked out
You can claim back the VAT on a debt (bad debt relief) when you've already paid that VAT to HMRC, the debt has been unpaid for at least 6 months from the later of when payment was due and when you made the sale, and you've written it off in your VAT records. You must claim within 4 years and 6 months of that same date.
Only the unpaid part counts. The VAT in it is the unpaid amount × 1/6 at 20%, or × 1/21 at 5%. You put the claim in box 4 of your VAT Return. If the customer pays later, you pay that share of the VAT back.
Worked example
You can claim back £800.00 of VAT (bad debt relief) on your next VAT Return.
20% VAT · standard VAT accounting · you've already paid HMRC the VAT on this sale · counted in whole months
| Invoice total, with 20% VAT | £6,000.00 |
|---|---|
| Less what the customer has paid | − £1,200.00 |
| Still unpaid | £4,800.00 |
| VAT in the unpaid part: £4,800.00 × 1/6 (the VAT fraction at 20%) | £800.00 |
| Unpaid for 8 months: you can claim after 6, and within 54 (4 years and 6 months) | Old enough |
| VAT you can claim back, in box 4 of your VAT Return | £800.00 |
Based on HMRC's rules for relief from VAT on bad debts (VAT Notice 700/18).
Questions people ask
Do I have to tell my customer I've claimed?
No. You only had to for sales made between 26 November 1996 and 30 April 1997.
What if I use cash accounting?
You only pay VAT on money you've received, so there's no VAT to claim back on an unpaid invoice.
What if the customer pays after I've claimed?
Pay back the VAT in what they pay, in box 1 of your VAT Return for the period you're paid.
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