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Bad Debt Relief

Volume 80: debated on Thursday 13 June 1985

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asked the Chancellor of the Exchequer when he proposes to provide for bad debt relief in the value added tax system, as recommended in the "Burdens on Business" report.

The Chancellor announced in his Budget statement an extension of the existing arrangements for VAT. Legislative provision is included in clause 31 of the current Finance Bill. The extended relief is to be available on the coming into force, early next year, of the provisions of the Insolvency Bill, where the administrator or administrative receiver certifies that the debtor's assets are insufficient to cover the payment of any dividend to unsecured creditors. Relief is also to be available where the debtor agrees a voluntary scheme or enters into a formal deed of arrangement with his creditors.