Capitals Ltd sold goods to Islanders Ltd on 1 July 2020: these goods were delivered on 3 July 2020. Capitals Ltd issued a sales invoice on 4 July 2020 and paid the related VAT output tax to HMRC on 6...

Capitals Ltd sold goods to Islanders Ltd on 1 July 2020: these goods were delivered on 3 July 2020.  Capitals Ltd issued a sales invoice on 4 July 2020 and paid the related VAT output tax to HMRC on 6 September 2020.

Islanders Ltd were due to pay for the goods by 31 July 2020, but failed to do so.  Financial difficulties led to Islanders Ltd being placed into administration and, ultimately, the company was subject to liquidation on 1 January 2021.  Amounts owed to Capitals Ltd by Islanders Ltd will not be paid.

Which of the following are conditions that must be met in order for VAT bad debt relief to be claimed by Capitals Ltd? Note: identify all of the conditions that need to be met in order for VAT bad debt relief to be claimed.

A. At least three months have elapsed since both the date of supply and the date on which the payment was due

B. The claim for VAT bad debt relief must be made within four years and six months from the later of the date of supply and the date that the payment was due

C. The debt must have been written off in the accounting records

D.        A copy of the sales invoice must have been retained