It is now the time of year when many people start reviewing their unpaid debts, so they can claim a tax deduction for them.
You can write off a bad debt and claim back GST credits, if the amount has been outstanding over 12 months, or you have evidence that it is a bad debt, e.g. the debtor is bankrupt. However, a written record must be kept.
If you do this, I suggest that you make a dissection called bad debt and issue a credit note to the debitor for the debt. This will adjust the GST, sales ledges and keep a note in the system.
