VAT - Company Van - Part Exchange

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KMB
KMB Registered Posts: 4 New contributor 🐸
in VAT
A self employed friend has a company van and part exchanged this for another. £15,000 is being paid by finance but an inital amount was paid, set out as follows:
Total cost £15,250
Post tax items £ 215
VAT £ 3,050
Total £18,515

Part exchange £ 650
Deposit £ 200
Balance £ 2,665 (taking off the finance amount).

HMRC have confirmed the amount paid can all be claimed back as VAT but I'm not sure how is best to put this through the ledger for the VAT and also part exchange? Any help would be appreciated.

Thanks

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  • Rozzi Rainbow
    Rozzi Rainbow Registered Posts: 465 Dedicated contributor 🦉
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    This is what I would do -

    Debits:
    Fixed assets additions £15250
    Licences and insurance £215 (I'm presuming this is the road tax for the first year)
    VAT £3,050
    Total £18,515

    Credits:
    Fixed asset disposals £650 (I would actually separate the VAT due on this)
    Cash/bank/capital intro £200 (however this was paid)
    Hire purchase £15,000
    Cash/bank/capital intro £2,665 (however this was paid)
    Total £18,515
  • Rozzi Rainbow
    Rozzi Rainbow Registered Posts: 465 Dedicated contributor 🦉
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    Sorry, it doesn't seem to have lined up properly. Just to clarify - the £650 is disposal proceeds. This will need comparing with the NBV of the old van in the accounts to calculate the profit or loss on disposal.
  • KMB
    KMB Registered Posts: 4 New contributor 🐸
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    That's great, thanks very much. :)

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