Accounting for VAT on Car leasing 50% restriction

Business Central/NAV User Forum
1

Hi there. Could anyone tell me the best way to enter Purchase invoices where only 50% of the VAT on car leasing can be reclaimed? Thanks! John

2

Hi Define a VAT code with the rate you want to use. Setup a new account eg. “Car leasing ½ VAT” and connect the new VAT code to the account. When you choose the account from a purchace document it will calculate from this code by default. Regards Karl

3

I dont think it’s that easy… The supplier charges the full amount of VAT which has to be recorded and paid but only 50% is then reclaimable.

4

It is that easy! The supplier charges you eg. 100 + VAT = 117,5 Credit the bank or another balance account 117,50 Debit the leasing account 108,75 Debit Purchase VAT account 8,75 Regards Karl

5

Set up a VAT product posting group called lease. VAT % sould be 8.046 and Bob’s your uncle (certainly not mine)

6

I did modify Navision this way: 1- VAT Posting Setup table > Allow VAT % values from -100 to 100 2- Some Reports, … may need to exclude VAT % negatives 3- VAT Statements > You will need to add lines to reflect “Not to be reclaimed VAT” Now create a VAT Product Posting Group with -100% (let’s call it NR) Then create an invoice like yours (an x % can’t be reclaimed) with two lines. Example: 1st line - Ledger account: - Amount: 100 - VAT: STD (16%) = 16 (standard VAT) 2nd line - Ledger account: <same as line 1> - Amount: 8 (not to be reclaimed (50% in this case)) - VAT: NR (-100%) = -8 (all amount) Result in ledger: - Ledger account: 100 + 8 = 108 - VAT: STD = 16, NR = -8 (Total VAT = 8) In your VAT statements you will get the right numbers. - Sales invoices VAT: 0 (no sales in this example) - Purchase invoices VAT: 16 (STD) - Not to be reclaimed VAT: 8 (NR with sign changed) - Final VAT to reclame: 8 (Purchases - Sales - NR VAT amount) Hope this helps.

7

Thanks everyone. We receive enormous leasing invoices. The best way seems to be to take the nett amount on each line, add half of the Vat amount and then post it to a Vat code at the rate of 8.045%. I really wanted to have the clerk post exactly what is written on the invoice but it seems that every line will have to be manually amended before entering into Navision. John

8

John, I think, if on the invoice you use prices include VAT and use the VAT rate at 8.045%, your clerk need only enter the gross value and Navision should do the rest.