Vat Reclaim on Vehicle

Accounting
1

Hi, we have recently purchased a van on HP

We had to pay the entire VAT of the value of the vehicle upfront.

How do we log this purchase so we are able to reclaim all the Vat this quarter

Many Thanks.

2

You need to book van as an asset with corresponding HP liability
Example

Dr Van 10,000
Dr Vat 2,000
Cr HP a/c 12,000

Record deposits + vat payments against HP a/c

3

So do I need to create a new hp account I’m sorry but I’m pretty new to accounting

4

You can use existing one 2310 Hire Purchase