Client wishes to buy asset for £20000 + vat, but vendor has debt on the asset of £10000. Vendor wishes to issue Invoice for £10000 + vat and Client repay the loan debt direct to the lender. Surely this is not appropriate, as the asset is still £20000 irrespective of the debt, and the debt settlement is simply part of the £24000 to be paid......or is something basic being missed? VAT implications etc?
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consideration
Whichever way you cut it consideration of £20,000 is being received and Should be chargeable to VAT.
Yes you are right, and are not missing a anything, except that it may be in the purchaser's interest to be sure that the loan has been repaid - if it secured on the asset.
But the correct figures are invoice for £24k including VAT settled by a payment of £14k to the vendor and £10k to the vendor's loan creditor.
Watch out...
Is it possible that the vendor is insolvent and that if, for instance, you pay the whole amount to him it will just go to paying off the overdraft, rather than the asset finance?
Yes - that is why I said it might be in the purchaser's interest to pay off the vendor's loan directly.