practice exam1 (level 3) (FAPS) - question about part exchange ??

When he bought the first van, only £27,500 is debited to the "Van" account. The VAT he paid disappears into the VAT account and is used to reduce his quarterly payment to HMRC. This is why VAT is not relevant when it comes to disposal.

"Also on question Biii Why did they include the VAT on the £36000 and not on the £9500?": The £36,000 doe not appear in Biii, I guess you mean Biv. This is about cash (which includes VAT), not asset value (which does not include VAT). His cash payment is the cost (£36,000) plus VAT (£7,200) less the part-exchange (£9,500) = £33,700