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nicolabrown
November 24, 2020
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Is it possible to apply 50% VAT to an invoice from a vehicle lease company. If so how do I do this please?

  • November 24, 2020
  • 1 reply
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Original commenter did not share additional details
Best answer by GeorgiaC

Hi mdj101, thanks for joining this thread - in this scenario, the VAT element would need to be accounted for separately using a 100% VAT transaction, you can do this by following the steps below:

 

  1. Go to + New and select Expense.
  2. Either choose a payee or leave that box empty.
  3. On the first line of the expense choose any of your Expense accounts
  4. For the amount enter a pound (1) and choose 20.0% S as the VAT code.
  5. On the second line choose the same expense account.
  6. For the amount, enter minus a pound (-1) and choose Exempt as the VAT code.
  7. The total of the expense will show as 0.
  8. Under the Subtotal box the VAT box will become editable.
  9. Enter the desired VAT amount into the VAT box and Save the expense.

This will create a 100% VAT transaction that will show in Box 4 on the VAT return.

 

The alternative would be splitting the transaction into 2 lines.

It is worth confirming with HMRC or your accountant if they are happy with this.

 

1 reply

MJoy_D
MJoy_D
November 24, 2020

You can create an invoice and set it to have a 50% VAT in a few easy steps, @nicolabrown.

 

You'll need to activate VAT from your account. This should, thereafter, populate automatically on the invoices. 

 

To set up your VAT, follow these steps:

  1. From the left navigation bar, choose Taxes.
  2. Click the Edit VAT drop-down then click Edit Settings.
  3. Make necessary changes and then enter the VAT registration number.
  4. Click Save

Once done, create a 50% VAT:

  1. Go to Taxes and select Add Tax.
  2. Select the type of tax you want to add.
  3. Provide all the necessary information.
  4. Click Save.

You can go back to your invoices page and create a new one. Enter the 50% VAT on the VAT column.

  1. Select + New and then Invoice.
  2. Provide all the necessary information.
  3. Select a VAT rate.
  4. When you're ready to send the invoice, select Save and send.

Check these articles for more information: 

Please let me know if you have any follow-up questions in creating your invoices, and or other questions. I'm here to help. Have a good one.

M
mdj101
May 10, 2022

I think what the OP meant is, is it possible to charge VAT on only 50% of the invoice.

 

When leasing a company car in the UK and using the car for personal use, you are only allowed to claim VAT back on 50% of the lease price.

 

Example

 

Car lease is £200 a month VAT at 20% on that would be £40, but you are only allowed to claim VAT on half of the amount so £100 is 0% vat and £100 is 20% vat.


How do you account for this in QB

G
GeorgiaCAnswer
May 10, 2022

Hi mdj101, thanks for joining this thread - in this scenario, the VAT element would need to be accounted for separately using a 100% VAT transaction, you can do this by following the steps below:

 

  1. Go to + New and select Expense.
  2. Either choose a payee or leave that box empty.
  3. On the first line of the expense choose any of your Expense accounts
  4. For the amount enter a pound (1) and choose 20.0% S as the VAT code.
  5. On the second line choose the same expense account.
  6. For the amount, enter minus a pound (-1) and choose Exempt as the VAT code.
  7. The total of the expense will show as 0.
  8. Under the Subtotal box the VAT box will become editable.
  9. Enter the desired VAT amount into the VAT box and Save the expense.

This will create a 100% VAT transaction that will show in Box 4 on the VAT return.

 

The alternative would be splitting the transaction into 2 lines.

It is worth confirming with HMRC or your accountant if they are happy with this.

 

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