In Regency Factors plc v HMRC [2022] EWCA Civ 103 (3 February 2022) the Court of Appeal (CA) dismissed the taxpayer’s appeal and held that Regency Factors plc (Regency) was not entitled to VAT bad debt relief because it had not complied with the procedural requirements for relief and had not otherwise proved its claim at the FTT.
A trader can claim VAT bad debt relief when it has paid for or accounted for VAT on a supply it has written off whole or part of the consideration or taxable amount as a bad debt and six months has passed since the date of the supply.
Regency provides invoice factoring services in consideration for fees. Regency operates a factoring current account (FCA) for each client but this does not allocate funds against particular invoices. Where Regency is unable to collect an amount either from a customer or failing that ...
