Contract Car Hire and VAT

Let’s say the car hire company invoice you £120 (£100 + vat), so £120 is paid in full.

The VAT on the invoice will be £20, although you will only be entitled to reclaim £10. So you would key in your purchase as per the screenshot I posted earlier:

Here you have the gross amount as £120 and a vat amount of £10, so just £10 is reclaimed on your VAT return but the gross total is still correct.

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