Car instalment sale asset or liability

**miriam790** · 15-Jul-14, 12:01 PM

Thank you Beancounter. Sorry, you said the company can't claim the VAT also not on the instalments? (it is a normal passenger vehicle). If we can't claim the VAT must we not book in the car in the fixed asset register with the full gross amount incl. VAT?

**Beancounter** · 15-Jul-14, 08:05 PM

Originally Posted by miriam790

Thank you Beancounter. Sorry, you said the company can't claim the VAT also not on the instalments? (it is a normal passenger vehicle). If we can't claim the VAT must we not book in the car in the fixed asset register with the full gross amount incl. VAT?

The vehicle is still an asset and must be reflected as such in the balance sheet, even if the VAT on it could not be claimed.

VAT can never be claimed on the instalments of an instalment sale agreement as you won't have tax invoices for each instalment. It's claimed on the purchase price of the vehicle as stated in the instalment sale agreement.