Hire purchase issue

Lillykins
Lillykins Registered Posts: 4 New contributor 🐸
Hi I am looking for some advice on posting a hire purchase for a lorry on VT plus. The scenario goes like this:

Price 43,500
Admin Fee 150
VAT @ 20% 8,730

29 Dec 11 Deposit (which was a loan) £5,000
28 Feb 12 VAT paid to HP company £8,730

Balance owed on vehicle £39,150
Charges (interest) 8,638.80
Total Payable 47,788.80

Vehicle picked up on 17 Mar 12. First instalment is paid on 5 Apr 12.

I have a VAT return due for 1 Dec 11-29 Feb 12 but I am afraid I'm confused when I account for what. Hopefully I have explained it clearly enough can an anybody help please.

Comments

  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
    The VAT is accounted for when the £8,730 is paid as the balance is on finance this is the date that the asset was purchased and therefore the full VAT is recoverable. Just remember not to reclaim VAT on the finance repayments!
  • Dcollins
    Dcollins Registered Posts: 179 Dedicated contributor 🦉
    You'll need a VAT invoice from the HP company, made out to your company. It might be included in the HP Agreement, but should be obvious.

    If paying this amount of VAT means you'll be filing a repayment return, or the box 5 figure will be significantly different from previous returns, the VAT office might ask why and want to see a copy of the invoice.
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