In Regency Factors plc v HMRC [2020] UKUT 357 (TCC) (13 November 2020) the UT held that Regency was not entitled to VAT bad debt relief.
A trader can claim VAT bad debt relief when:
Regency provided factoring services. It issued invoices to clients for those services at the time when the invoices which were the subject of the factoring service were assigned to Regency for collection. Regency then made an advance of funds to its clients. The funds advanced represented approximately 80% of the value of invoices (after a deduction for Regency’s fee). Regency then collected the invoice value from its clients’ customers;...