VAT and personal use of a Leased Car

[Unibooks]

Hi, I have a query about Car Leasing VAT & Private use.

Part 1 is an accounting query.

I have a self-employed client who is going to lease a car which will have some personal use & the car has high emissions. So to make the maths a bit easier, lets say that the monthly gross lease costs are £600. I know that we can only claim 50% of the VAT so that would mean Gross £600 VAT £50 and Net £550. Because the car has high emissions 15% needs to be deducted from the Net and there is 5% personal use so we have a 20% deduction off of the Net, and can now only claim 80% for expenses.

My question is can we claim 80% of the £550 (£440) or because of the original 50% VAT bit, can we only claim 80% of half of the net i.e. 80% of £275 (£220) ?

And Part 2.

How on earth do I record this into QuickFile to ensure everything matches up to the original amount of £600 coming out of the bank account.

Thanks in advance of any advise you lovely people can offer.

[QFSteve]

Hello @Unibooks

My question is can we claim 80% of the £550 (£440) or because of the original 50% VAT bit, can we only claim 80% of half of the net i.e. 80% of £275 (£220) ?

You are best to consult an accountant for processional advice on what you can or can not claim.

I found a couple of forum posts which may answer your second question.

VAT rates for Lease Cars

I’m trying to do what was described in the original question. My bills for car leasing include VAT at 20% but only 50% of that VAT is claimable on a VAT return. Without any additional action those entries in the QuickFile VAT report are entered with the full amount of the VAT, not 50% of the amount.

Contract Car Hire and VAT

I read an earlier forum entry about this topic and concluded that QuickFile has no way of entering the missing half of VAT so that the Purchase ledger is correct? I introduced a new VAT rate of 10% to get the VAT amount correct, but then found I couldn’t find a way of getting the ineligible portion of VAT entered. Am I missing something?