I am registered for VAT and completing my first year’s accounts.
In December 2015 I purchased some capital equipment (I was charged VAT) and then I used a loan company to pay for it monthly (who also charge me VAT).
So, I originally raised an invoice for the sale and paid it by opening a Loan Account, and then complete my bank account monthly payments by tagging them each time. But now, I realise that the VAT for the loan element isn’t being accounted for anywhere. I am paying £213.30 plus VAT £42.66 per month. Please can anyone help to explain the best way to record this.
The original invoice for the capital equipment was £5575 + VAT. The loan is a total of £7521.25 + VAT over 36 months. So I also need to find a way to record the amount I owe by £831.25. Not sure the best way round this all. Perhaps I need to pay for an accountant? Hope not! Appreciate any advice.