After using the Write off, Refunds and Returns wizard you can reclaim the VAT on the write offs. You'll need to satisfy HMRC bad debt relief requirements.

Bad Debt Relief Conditions for customers

HMRC state that you're only eligible to claim back VAT under certain circumstances.

For example

• You've already accounted for the VAT on the supplies, and paid it to HMRC
• You've written off the debt in your accounts and transferred it to a separate Bad Debt account
• The debt has remained unpaid for six months after the time payment is due and payable. Or, if later, six months after the date of the supply
  

   NOTE: There are other conditions you must satisfy. For a more detailed description contact HMRC, or, visit their website at http://www.hmrc.gov.uk

These rules don't apply when you write-off sales credits.  You need to repay the VAT at the point of write-off.

Bad Debt Relief Conditions for suppliers

Before you write-off purchase invoices to bad debt, check if you need to repay the VAT reclaimed when you VAT Reconciled the invoice. There are different rules depending on when you received the supply.

For further information about this, refer to VAT Notice 700/18, available from HMRC or visit their website at http://www.hmrc.gov.uk