Bad debt relief

Key requirements

Claim within five years of the supply after accounting for and paying GST on a money consideration, writing off the debt, and taking reasonable recovery steps. Normally 12 months must have elapsed from supply, unless the debtor became insolvent sooner. The supply value must not exceed market value and goods ownership must have passed to the customer. A write-off without collection efforts is insufficient. Complete and retain the self-review checklist; include the tax in Box 7 and identify the relief in Box 11. If money is subsequently collected, repay the corresponding GST through Box 6. Use the GST-inclusive outstanding amount and payment in the repayment calculation. Keep original invoices, payment history and recovery correspondence so that partial relief and later collections can be reconciled.