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Fixed assets register and VAT

Gentle JesusGentle Jesus Well-KnownRegistered Posts: 241
Hello
Just one quick question i have been told that wen recording a purchase of a fixed asset in the fixed assests register you should include the VAT in the original cost figure.

But i have had a look at a past simulation and the original figure does not include VAT ??

i am confused about this can some one help me plz !??

Comments

  • sarahwilsonsarahwilson Experienced Mentor Registered Posts: 567
    You don't include VAT on the cost of things in the fixed asset register. If you think it through you are going to reclaim the VAT, therefore its not really a cost to the business of the asset so you use the net figures in the fixed asset register. The exception to this being a new car which you cannot reclaim the VAT on and so you should include the gross figure.
  • Gentle JesusGentle Jesus Well-Known Registered Posts: 241
    thanks for the answer :D

    but there is still one problem in the skills test unit 5 D1895 the company is registered for VAT but they part exchange a old van for a new van i looked at the answer and the original value of the new van does not invlude VAT ?? :S

    you told me that motor vehicles should be recorded in the fixed assets register as their gross value but it the answer it appares that it does not ?? :s

    need help thanks guys :confused1:
  • sarahwilsonsarahwilson Experienced Mentor Registered Posts: 567
    Ah this is the VAT man making things hard to remember.

    For some reason unknown to me, you can claim VAT back on a new van but not on a new car. Therefore the skills test is correct, the amount you put to the fixed assets register is the net amount.
  • Gentle JesusGentle Jesus Well-Known Registered Posts: 241
    lol so confusing :S the van was purchased for business use if i remember correctly does that make n e diffrence ???
  • vishavisha Well-Known Registered Posts: 218
    The simple rule on motor vehicles is that when a non-commercial vehicle is purchased, you can not recover VAT from Inland Revenue and therefore the cost of buying that car is including VAT. BUT when a commercial vehicle is purchased VAT is recoveable and therefore the cost of purchase of that motor vehicle is excluding of VAT.Only the cost of purchse of the motor vehicle to the business is register in the FAR.
  • Forever_studentForever_student Just Joined Registered Posts: 4
    you are a star, that is the answer i was looking for.



    Many many thanx
  • coojeecoojee Experienced Mentor Registered Posts: 794
    But if the van has windows in the back of it then you can't reclaim the VAT. Just to make life even more difficult! (There are other rules aswell like payload, rear seats etc but the easy way we always used to remember is windows or lack thereof)
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