My company has recently bought some assets for which we were invoiced.These were posted to the purchase ledger.
A month later we decided to finance these invoices. We did this by raising an invoice to the finance company via the Sales Ledger.
Both these transactions will therefore show up on the Vat return and both involved VAT.
Is this correct?
Thanks
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Replies (2)
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Ask yourself the question ...
... what goods or services have you supplied to the finance company? Just a guess, but I suspect that both your accounting and VAT treatment are incorrect - exactly what is the arrangement with the finance company?
Lightbulb moment
Ahh... nothing supplied to the finance company. The purpose of the invoice was to enable them to give us the money. Just the p/l transaction goes through the VAT return then?