---
title: Bad Debts (When you don’t get paid)
description: "Put simply, bad debts are when you don't get paid by a client or customer. It could be that you've provided a service and they fail to pay for whatever reason. Bad debts cannot be claimed as a business expense…"
url: "https://malgrabooks.co.uk/docs/bad-debts-when-you-dont-get-paid/"
updated: "2026-02-18"
---

# Bad Debts (When you don’t get paid)

Put simply, bad debts are when you don't get paid by a client or customer.

It could be that you've provided a service and they fail to pay for whatever reason.

Bad debts cannot be claimed as a business expense as consultants use the [Cash Basis accounting](https://tax.malgrabooks.co.uk/knowledge-base/abbreviations-glossary#cash-basis-accounting) system - this means that you only record any income or expenses when the transaction takes place, and as no monies have transferred hands you haven't actually received anything.

## External Links

- [HMRC Guidance Link](https://www.gov.uk/expenses-if-youre-self-employed/legal-financial#when-your-customer-does-not-pay-you)