Bad Debt Provision

[Boyztoyz]

I work as a self employed consultant since 2011. I provide assessment and report on business structures and logistical pathways. Over that time I have accrued over €40K of bad or unpaid debts and when I ask my accountant to make a bad debt provision each year he claims that as I have claimed for the expenses related to the service I cannot make a bad debt provision against my unpaid invoices. I don't take a salary from my business as I am retired and have a pension but I do make pension contributions. I am about to wind up the business and would like to make some provision for these bad debts against a large tax bill for 2025. Any advise would be greatly appreciated.

 

[Fortune]

. I don't take a salary from my business as I am retired and have a pension but I do make pension contributions.

This could turn out to be a costly mistake. Tax years in which you don't take a salary cannot be counted as years of service for pension funding calculations. You should take even a small salary each year.

 

[cremeegg]

This doesn't make sense.

I have accrued over €40K of bad or unpaid debts

Have you recorded this as income and paid tax on that income. If so there is no obvious reason why you would not provide against or write off the debt as appropriate.

he claims that as I have claimed for the expenses related to the service I cannot make a bad debt provision against my unpaid invoices

This is meaningless. You may have misunderstood why you cannot write off the debt.

If you were using a cash basis of accounting and only recorded income as received, then there was no income recorded against which you could write off the debt.