Mark,
Please help - I've ordered a new van and paid a small deposit but won't receive a VAT invoice until delivery, when payment of the remainder will also be due.
How should I record this advance payment of a deposit?
Many thanks,
Gary
Hi Gary,
Create a Money Paid Out transaction with the Type set to 'Advance Payment'. Later when you record the purchase invoice Solar Accounts will offer to allocate the advance payment to the invoice - click 'Yes'.
Regards,
Okay, thanks,
One other query re purchase of my new van - reading your help file on hire purchase and the example of a van purchase you suggest that the sale of my existing van in part ex should be recorded by raising a purchase credit note. Why this rather than a normal sales invoice? What is the difference? The dealer has asked for a sales invoice for my old van so they can reclaim the VAT - will the credit note form the same function?
Also I'm on the flat rate VAT scheme, by following your suggestion I presume I will only reclaim the VAT on the difference between the purchase cost of the new van less the part ex cost, whereas if the old van was recorded as a conventional sale I would reclaim the full VAT on the new van and pay my flat rate percentage on sale of the old one and so be better off - or isn't this allowed?
Thanks,
Gary
Hi Gary,
(Other users note: the help page Gary mentions is here: http://www.solaraccounts.co.uk/help/how-to-record-a-hire-purchase-agreement.php )
In this case the only difference between a sales invoice and a purchase credit note is that the purchase credit note can be allocated to the purchase invoice, thus decreasing the balance of the purchase invoice. A sales invoice would have the same effect on the accounts. I believe a purchase credit note is acceptable for VAT purposes, but please check with HMRC on 0300 200 3700. If it is not acceptable, I would change simply change the printed title of the purchase credit note to 'invoice', print it, then change the title back again.
I assume your purchase of the old van was not subject to flat rate rules (since it was a capital purchase above £2,000). Therefore your 'sale' of the old van must also be excluded from the flat rate rules - in the purchase credit note window click More Options > VAT Treatment > VAT Treatment Details, and remove the tick next to 'Flat rate scheme applies to this transaction'. Again please check with HMRC on this point.
Regards,
