VAT

System

Hi,<BR>Just trying to cram for this exam tomorrow. <BR>I have a thing with VAT in that i dont understand it! <BR>When doing the fixed asset registar, do we record the cost of fixed assets including vat or excluding vat?<BR>I also recall something about if its a car you buy you dont record Vat, but a van you do?? is this right?? <BR>please help!

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VAT

assets should be shown as net value unless they are motor vehicles.<BR><BR>motor vehicles are hard to prove whetheer they are used privately or soley for the business, therefore have to be shown inclusive of vat (ir capitalised).<BR><BR>Delivery vans you can claim vat back on so these are shown on the register as net of vat

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VAT

thankyou that helps.<BR>If they said you have purchased a motor car for work purposes though, would I then treat it as net in fixed asset registar and record the VAT seperate in the ledgers?

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VAT

I would but it worth saying in your answer somewhere ' ask per text the vehicle is used for work purposes only'.

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VAT

OK.<BR>So if you had to record the entries for purchasing a motor vehicle for £5000+17.5% vat would you:<BR>Debit Motor vehicle account £5875<BR>Credit Bank or creditors £5875<BR><BR>But if you were purchasing a delivery van for £5000 + 17.5% vat would I:<BR>Debit Vehicles account £5000<BR>Debit VAT £875<BR>credit creditors/bank £5875<BR><BR>

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correct

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VAT

ok thanks. I understand that now.

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VAT

On page 45 in the unit 5 BPP book (2004/2005) it says that irrecoverable VAT will not be dealt with until unit 7. It also says that at intermediate level we just assume that we can not recover VAT on cars (so put them in fixed assets at their gross value). So I dont think we need to be that concerned about it now!<BR><BR>Does this help??

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VAT

Hi<BR><BR>Is it right that you can only claim part of the VAT back on vans, if so is that the amount that we post to the vat account?