[Question] Capturing financed vehicle in Pastel

[Lauren R]

Hi,

Our company purchased a vehicle which was financed through Absa over a period of 5 years. I desperately need help on how to record this in Pastel.

Any help would be most appreciated.

[Neville Bailey]

Hi Lauren,

There is a trick on how to properly record such a transaction in a General Journal, so that Pastel interprets the VAT correctly as input tax, rather than as output tax. I am assuming that the vehicle is a single-cab bakkie, otherwise you can't claim the VAT.

If you can send me a scanned copy of the finance agreement, where it details the price, plus extras, plus finance charges, etc, I can send you a screen shot of what your journal must look like.

You will need to have the following GL accounts in place in the Balance Sheet: Instalment Sale Creditors, Finance Charges in Advance, Motor Vehicles @ Cost. Let me know what your GL account codes are for these accounts.

[Dave A]

Neville (or anyone) - when it's a hire purchase agreement, what is the correct VAT treatment?

VAT on instalments (effectively adding up to VAT on the total instalments value) or
VAT on original capital value?

I've always wondered about this one.

[Neville Bailey]

Neville (or anyone) - when it's a hire purchase agreement, what is the correct VAT treatment?

VAT on instalments (effectively adding up to VAT on the total instalments value) or
VAT on original capital value?

I've always wondered about this one.

VAT on original capital value, provided it's a single-cab bakkie.

VAT on instalments would apply in the case of a lease (Mark, please correct me if I am wrong here).