The Upper Tribunal adopted a purposive approach to the construction of the Value Added Tax Act 1994 s.36 concerning the availability of bad debt relief and concluded that where an outstanding debt was made up entirely of VAT, the whole of the outstanding VAT should be refunded as bad debt relief.

UT (Tax) (Lord Drummond Young) 20/12/2011
[2011] UKUT 498 (TCC)