Initial rental lease car (Sole trader) - BRAIN FOG
monkeypuzzle47
Registered Posts: 134 Dedicated contributor 🦉
Can somebody advise, as hmrc cannot give me an answer this evening.
Sole trader client took out a lease carAug 15. I know that i need to disallow a flat rate of 15% due to higher emissions. My question is what do we do with the initial rental lump sum? Does this need to be spread out over the entire term? I would not imagine the entire amount would be allowable in the first year. Thank you in advance.
Sole trader client took out a lease carAug 15. I know that i need to disallow a flat rate of 15% due to higher emissions. My question is what do we do with the initial rental lump sum? Does this need to be spread out over the entire term? I would not imagine the entire amount would be allowable in the first year. Thank you in advance.
0
Comments
-
For those that will come along shortly, as a starter, you will need to tell them what kind of lease it is.0
-
PCH - Contract Hire, thank you.0
-
My i add the initial payment represents 6 months.0
-
Nobody wants to help you!
What usually happens is ... 36 month rental period, with 6 months up front ... there won't be any payments in the final 6 months.
If that is the case, you have 6 months that need to be taken to the balance sheet (prepayment), and the cost will be release in the final 6 months ... which may or may not straggle year ends.1 -
thank you - update!! I have now established the advance was one initial advance payment.
36 payments comprising of as follows..
1 advanced payment 2208.60 03/08/15
First regular payment 368.1 10/08/15
then
34 monthly 368.10
As the car will be returned on the 36 month i am now more confused as to deal with the advanced payment as there are no periods where they will have the car with no monthly payment. Just taken advice from a chartered accountant who said the original deposit can hit the P and L in one go?
Still want to double check and check again:)
Hope i am making sense. :-)
0 -
I would treat the initial payment in the same way.
Although it's effectively 6mths payments, it's essentially an "expensive" single month's hire.1 -
Thank you for your reply TreadStone and 98erm0
-
I agree.TreadStone said:I would treat the initial payment in the same way.
Although it's effectively 6mths payments, it's essentially an "expensive" single month's hire.
2
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 323 NEW! Qualifications 2022
- 165 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 88 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership