fuzzydunlop
Registered User
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We are setting up a subsidiary business which will purchase and rent out motor vehicles. Our main business is VAT exempt, and the subsidiary will be whoely owned by the parent company. I believe the company has been set up and we are VAT registered but I have since heard about a VAT threshold, what is this and could we have jumped the gun?
Secondly, presuming we are correct to be VAT registered and charge VAT on the rentals at 23%, with regard the purchase, what is the accounting treatment?
We will pay down a deposit of approx 25% on the vehicles, and the remainder will be financed by way of HP.
Am I correct in assuming we should capatilise the asset as the Net plus VRT and claim back the VAT? is this done up front? or is it done on the HP repayments?
As our main company does not operate VAT, I don't know much about it's treatment, and will go to our accountant on it, but I just thought I would do a bit of homework on it first.
Secondly, presuming we are correct to be VAT registered and charge VAT on the rentals at 23%, with regard the purchase, what is the accounting treatment?
We will pay down a deposit of approx 25% on the vehicles, and the remainder will be financed by way of HP.
Am I correct in assuming we should capatilise the asset as the Net plus VRT and claim back the VAT? is this done up front? or is it done on the HP repayments?
As our main company does not operate VAT, I don't know much about it's treatment, and will go to our accountant on it, but I just thought I would do a bit of homework on it first.