Tax · Daily operations · 8 min read

Bad-debt relief and import VAT

Propose and post tax adjustments that do not come from an invoice, with a different person posting each one.

Before you begin

• Open Tax > Adjustments. It lists Number, Kind, Tax date, Reference, Tax code, Net, Tax and Status.
• To propose you need tax.return.prepare. To post or reject you need tax.return.approve, and you cannot be the person who proposed.
• Adjustments post a journal and appear in the return of the period of their tax date.

Bad-debt relief

Relief lets you recover VAT you already paid on an invoice the customer did not pay, once the debt is written off and enough time has passed.

Before you begin

• The customer invoice is posted and the debt has been written off in Accounting.
• The company's Bad-debt relief: months after the date of supply (default 6) has passed since the invoice date. Set in Tax settings.

Steps

1. Press Bad-debt relief.
2. Choose the Invoice written off.
3. Type Customer told on: the date the customer was told the debt was written off.
4. Leave Amount to relieve (with tax) blank to relieve everything written off and not yet relieved, or type a smaller amount.
5. Type the Tax date. It cannot be before the invoice date plus the months setting.
6. Type the Reason (up to 300 characters).
7. Press Propose.
8. A different person opens the adjustment and presses Post.

Example

An invoice of 1,050.00 including VAT 50.00, dated seven months ago and fully written off. The proposal is net -1,000 and tax -50 on the invoice's tax code. On posting: Dr Output VAT 50 / Cr Write-off account 50. The return for the period shows -50 output tax.

If the customer pays later

1. On the posted relief press Customer paid: reverse.
2. Another person posts the recovery: Dr Write-off 50 / Cr Output VAT 50. The relief shows Reversed.

A second reverse is refused: 'That relief is already being reversed.'

Refusals

Import VAT

Import VAT records VAT on goods you imported, from the customs declaration.

Steps

1. Press Import VAT.
2. Type the Customs declaration number, for example DXB-IMP-2026-0001. Each declaration can be recorded once.
3. Type the Customs value, for example 20,000.
4. Choose the Tax code, for example IM. It must be usable on purchases and have a rate on the tax date.
5. Type the Tax date (the customs declaration date).
6. Optionally type VAT on the declaration. It must be within 0.05 of value x rate.
7. Choose Accounted by: Reverse charge on the return or Paid at the border.
8. For Paid at the border, type Paid from (account), for example 1110.
9. Press Propose. A different person presses Post.

Example

Value 20,000 at 5 %: tax 1,000.00.

• Reverse charge: Dr Input VAT 1,000 / Cr Output VAT 1,000. The return shows both, so net payable is unchanged.
• Paid at the border: Dr Input VAT 1,000 / Cr 1110 Bank 1,000. The return shows input of 1,000.

Refusals

A customs value of 0 gives 'Choose between 0.01 and None.'; type at least 0.01.

Post or reject

• Post needs a different person: 'Somebody other than the person who prepared this adjustment must decide it.'
• Reject needs a Why (up to 200 characters). Nothing is posted and the reason is added to the record. Rejecting is not restricted to another person, so agree your own rule.

Good to know

• A posted adjustment cannot be edited. Use the reverse button for bad-debt relief, or ask Finance to correct the journal.
• Check Tax > Reporting > Tax register to see the adjustment's effect.