The Climate Change Levy (General) Regulations 2001

Bad debts: entitlement to tax credit

10.—(1) Paragraph (3) applies where—

(a) a person has supplied a taxable commodity and has accounted for and paid the CCL chargeable on the supply,

(b) that person and the recipient of the supply are not connected or are not the same person,

(c) that person has issued to the recipient a climate change levy accounting document (or, if the issue of such a document is not required by or under the Act, other invoice) relating to the supply showing the CCL chargeable,

(d) the whole or any part of the price for the supply has been written off in his accounts as a bad debt, and

(e) the period of 6 months referred to in paragraph (8) has elapsed.

(2) Any question whether a person is connected with another for the purposes of paragraph (1) shall be determined in accordance with section 839 of the Income and Corporation Taxes Act 1988(1).

(3) The person shall be entitled to a tax credit in respect of the amount of CCL chargeable calculated by reference to the outstanding amount (subject to the provisions of this Part including those provisions relating to the making of a relevant claim to the Commissioners).

(4) In this regulation and regulation 16—

• “claim” refers to a claim in accordance with regulation 14 or 15, and “claimant” shall be construed accordingly;

• “the outstanding amount” refers to—

  (a)

  if at the time of the claim no part of the price written off in the claimant’s accounts as a bad debt has been received, an amount equal to the amount of the price so written off;

  (b)

  if at that time any part of the price so written off has been received, an amount by which that part is exceeded by the amount of the price written off.

(5) In paragraph (4), “received” refers to receipt either by the claimant or by a person to whom has been assigned a right to receive the whole or any part of the price written off.

(6) Accordingly, the tax credit arising under this regulation shall be of an amount equal to such proportion of the CCL charged on the supply as the outstanding amount forms of the total price.

(7) For the purposes of this regulation, where the whole or any part of the price for the supply does not consist of money, the amount in money that shall be taken to represent any non-monetary part of the price shall be so much of the amount made up of—

(a) the price excluding the CCL chargeable, and

(b) the CCL charged on the supply,

as is attributable to the non-monetary consideration in question.

(8) Neither the whole nor any part of the price for a supply shall be taken to have been written off in accounts as a bad debt until a period of not less than six months has elapsed from the time when such whole or part became due and payable to, or to the order of, the person who made the relevant supply.

(9) Subject to paragraph (8), the whole or any part of the price for a relevant supply shall be taken to have been written off as a bad debt when an entry is made in relation to that supply in the claimant’s climate change levy bad debts account (see regulation 7(2)).

(10) Where the claimant owes an amount of money to the recipient of the relevant supply which can be set off, the price written off in the accounts shall be reduced by the amount so owed.

(11) Where the claimant holds in relation to the recipient of the relevant supply an enforceable security, the consideration written off in the account of the claimant shall be reduced by the value of that security.

(12) In paragraphs (8) to (11), “relevant supply” refers to any taxable supply on which a claim is based.

(13) In paragraph (11), “security” refers to—

(a) in England, Wales or Northern Ireland, any mortgage, charge, lien or other security;

(b) in Scotland, any security (whether heritable or moveable), any floating charge and right of lien or preference and right of retention (other than a right of compensation or set-off).

(1)

1988 c. 1.