Nominal Code for Car lease?

Nominal Code for Car lease?

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Hi All,

We have recently started leasing a company car for our sales director, the car is used for both business and personal.

We are a limited company and our sage has been set up as to reflect this, the nominal code I think would be correct is 7703 which is 'leasing costs'. I am also unsure on what I am entitled to claim back in terms of VAT as I know using the car for personal use has an effect on this?

Please advise

Many Thanks in advance 

Jack

Replies (8)

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By teresaweezer
06th Jul 2015 14:52

Assuming it is Lease Hire...

Then using 7703 is correct as it is not a balance sheet item, and you can reclaim 50% of the VAT.

Thanks (1)
Replying to DJKL:
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By JackThornber
06th Jul 2015 15:22

Hi,

Yes it is a lease hire, however, I am not sure how I would claim half VAT as my tax codes are only standard 5% 20% 0%

Do I have to choose T1 and manually half the VAT?

Thanks

Jack

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By andy.partridge
06th Jul 2015 14:56

Contract hire?

Agree with tweezer.

Thanks (1)
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By NHGlos
06th Jul 2015 15:47

Maintenance

Does the lease include maintenance services as an extra/separate charge? If so, VAT treatment is different for the car element and service element.

Have a look at VAT notice 700/64 and notice 700/57 (agreement 13). You'll need to Google them as links don't seem to be working.

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RLI
By lionofludesch
06th Jul 2015 15:38

Correct ?

I don't really get this debate on the "correct" code.  Sure - it needs to be a P+L item but there is no "correct" code.  Personally, if I had more than one contract, I'd like one code for each contract so they definitely wouldn't all be 7703.

Is that not the advantage of having 10000 codes to go at ?

Thanks (1)
Replying to Red Leader:
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By kiwilondon99
06th Jul 2015 16:34

Data entry

surely one NL code is sufficient - IF your A/P inputter is up to it - they would or must enter the MV Reg in as part of the description fields, so when reviewing one code @ top level you know whether all cars are invoiced in the month [ ie all costs are there for the month - if not accrue or review AP posts!!! ], and any variations from an analysis of the account. If departmental accounting used -  you see the one or many cars on department review.  Keeping the ledger skinny allows for straighforward setups and tagging, and data export.  Also all costs are retained a group range - say MV Expenses

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By tom123
06th Jul 2015 19:14

The thing about nominal codes is

The thing with nominal codes is that they mushroom. I am somewhere between Kiwi and Lions views. Ideally you want as many nominal codes to be broadly level each month, as it makes for easier review.

So, for example, don't mix a fixed monthly charge with one off charges (such as daily car hire) in the same code. That way you can review at high level. The problem with having a code per vehicle is that the codes become redundant once the vehicles change, and you may not be able to change the names - depends on your software.

My company appears to have chosen the worst of all worlds - separate codes per vehicle but then referring to each vehicle by a random code (ie Vehicle 1, Vehicle 2 etc), which means the AP team need all sorts of checklists to help them pick.

 

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RLI
By lionofludesch
06th Jul 2015 23:19

Deep

Gosh - that's very deep thinking.  My thought was that's it's easier to add numbers together rather than analyse some huge nominal account for further detail.

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