VAT paid upfront on finance invoices

[kingdom12]

We have got a quite a substantial finance for the new fleet of plant we bought
we have paid 20% of the total amount plus whole VAT of the finance invoice upfront. So the monthly payments we make are no vat
my question is how to i put this on the system
how do i show the vat paid upfront and claim it in the respective return

sorry if my question nit very clear or sounds silly but im not an accountant

[QFMathew]

Hi @kingdom12

If I’ve understood correctly, you need to account for just the VAT on a payment for it to be picked up in the VAT return.

If that is the case, you need to enter two lines on the invoice - 1 at the full value with the VAT, and 1 for the full value as a negative, with 0% VAT. The result is only the VAT is due.

For example, let’s say I need to account for 20% VAT on £10,000. My invoice would look like this:

As you can see, the balance due is equal to the VAT amounts.

Of course, you can add multiple lines to this as you wish.

Hope that helps!

[FaradayKeynes]

Lets say net purchase price for plant on finance lease is 1000+ vat(20%)200, total 1200

Entries would be

Dr Plant & Machinery £1000
Dr Vat input a/c 200
Cr Creditors 1200

You can achieve above by simply creating a purchase invoice in QF

Any payments to suppliers , initial deposit or monthly payouts tag it to this purchase invoice

Your vat will be accounted for in vat return (accrual ) basis.

If you are on cash basis for vat then manual adjustment in vat return would be required