A new client who's business started on the 1st Jan 2013 purchased a new van for £10,500 on the 31st Dec 2012 on finance. Now he is paying for this van on finance. I know this was purchased 1 day before his official business start date but do I enter the finance amount paid in the vat return because its a business asset over £2000? Or do I ignore the van purchase vat and just do the usual % of sales on the return?
Many thanks
Thanks Mark. So how would I claim the Vat back on the van? Since he pays back monthly on finance would I enter the vat from the monthly payments less the interest amount onto the purchase part of the Vat return? Surely I wouldn't just claim the full amount in one return would I?
As long as you have a valid VAT invoice the WHOLE of the VAT can be recovered in the next VAT Return. Normally the deposit you have paid would have included the VAT element.
As trueman says the deposit is normally at least a 1/6 of the cost of the van in order that the VAT can be claimed at the start.
Assuming this is an finance lease/HP agreement rather than an operating lease. If an operating lease then can only claim the VAT with each payment and can only claim 50% of the VAT if personal use of the vehicle.
