Bad Debt And Corporation Tax
Every company, regardless of size or experience, will have to deal with bad debts at some point in their history. Debt management and debt collection are crucial to the successful running of a company and systems need to be in place to ensure that all is done to recover debts, especially before the end of […]
Every company, regardless of size or experience, will have to deal with bad debts at some point in their history.
Debt management and debt collection are crucial to the successful running of a company and systems need to be in place to ensure that all is done to recover debts, especially before the end of the tax year.
Daniels Silverman work in partnership with large corporations and companies as well as SMEs to ensure there is robust credit management in operation as well as an effective debt recovery process to make sure that the money owed comes back to the business.
There are lots of business who offer lines of credit, providing services or goods to a customer and then invoicing them later. There are some clients who become less inclined to pay promptly once they have received the goods or service and this is where working in partnership with an established company can really help.
Outsourcing your credit management to a company like Daniels Silverman means that all of your invoice payments will be managed and we will work tirelessly to make sure that late payments don’t become debts. This service is white-labelled, and we act as a part of your company, working hard to both recover your money and protect your client relationships and reputation.
If an overdue payment becomes a debt, Daniels Silverman have the experience needed to recover that money. Every company is different and recovery plans are individually tailored to suit the needs of the business. Recovering the debt should not cost you the client and any potential future business, this is when using experts really can pay dividends. Reputable collection agencies will understand that your client relationships are important to the business and work hard to ensure that the relationship is not damaged.
There are some cases where a bad debt cannot be recovered, and this then has tax implications for your business. If a debt has gone bad, you can reclaim the cost of the debt from your corporation tax minus the VAT element. However, you must be able to demonstrate that all reasonable steps have been taken to recover the debt before you can do this.
The amount of steps taken are related to the size of the debt, you would not be expected to allocate huge resources to recover a £30 debt, however, if it is a larger amount then you need to demonstrate that you have made serious attempts to regain the money and have an audit trail detailing the debt as being not collectable, which passing to Daniels Silverman would give you through our client reporting systems.
Having a pro-active attitude to credit management and debt recovery will put your business in the strongest position it can be with your accounts and tax obligations and partnering with an established and reputable agency like Daniels Silverman means that while we are working hard on these areas, you are free to concentrate on growing your business.
Get in touch to find out more about the ways we can help to support you.