We have entered into a 5 year finance lease for some plant which is for £28k + £5.6k VAT = a total cash price of £33.6k. There is a sum of the digits schedule for the monthly payment allocation between paying down the capital and the interest charge. My question is can we reclaim the VAT upfront or do we need to do it on a monthly basis? Also, is the finance agreement adequate back up for the VAT? (or do I need an annual VAT schedule from the finance provider?)
Thanks in advance for any replies.
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Replies (3)
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The answer will be in the paperwork, though it sounds like you are repaying a loan which you have taken out to buy the plant for £28k + VAT.
If that's so, you can claim all the VAT on your next return.
It's a hire purchase agreement which we are accounting for as a finance lease
Then you're grand.