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gbenga says

Please on the Refund of VAT my note says 4 year limit but the lecture note claims 3 year limit….kindly clarify please

zeshan.saeed says

nice and simple… Thanks OT…!

🙂

Svitlana says

Hello, thank you very much for your lectures.

Help me please to understand two moments about VAT on motor cars:

1) Input VAT on motor cars not used wholly for business purposes cannot be reclaimed. If it is a hire purchase or lease and every payment includes VAT – Cannot it be reclaimed either?

2) When we buy fuel at petrol station we get a receipt. Can it be used as a VAT invoice?

Thank you in advance, Svitlana.

Norman says

How does the debt that’s being written off get to account for the 5%discount, at what point do customers get the discount since it’s a prompt payment discount? I was thinking its applicable to prompt paying customers, like receivable upon making payment – how then do we account for it on a debt that’s being written off. Is it a discount which is awarded to any customer upon making a purchase?

George says

Hi Norman,

The Output VAT that the business charge the customer is assuming that the customer will take the discount, irrespective of whether the customer actually takes the discount. Therefore the input VAT to recover on impairment must reflect the amount of VAT that has been paid.

Hope this helps

Adeolu says

ok im starting to get it, so:

to get from vat inclusive figure to vat exclusive you multiply by 100/120

to get the vat figure you multiply vat inc figure by 20/120

am i right or am i way off lol ?

nikki says

Yup, that’s correct! 🙂

nikki says

For the irrecoverable debt… How come we didn’t use the £840?

Adeolu says

the irrecoverable debt: to be able to claim relief for irrecoverable debt, debt must be older than 6 months. The £840 is due 5th december 2013, our quarter end was march 2014. december to march is only 3 months so we do not include the £840.

get it?

nikki says

Ooooohhh!!! Okok thanks!!! 🙂

Adeolu says

Hi,

Can someone please explain to me how we know what percentage to multiply by when something is inclusive of vat or exclusive of vat, I’m getting confused with the multiplying by 100/120 and 20/120? Is it something to do with output and input vat?

Thanks.

nikki says

Hi, the vat inclusive price is 120% and vat exclusive price is 100%… So that’s where your elementary school algebra kicks in. I wish I could write it out on a piece of paper & send u a pic so I could show u what I mean.

nikki says

Car 16450… They say it’s vat inc… So that’s 120% (or 1.2 or 120/100)… Now to findt for 20%… U can do some cross multiplication.

120/100 = 16450

20/100 = ?

?? ? = 16450 ?? 20/100 ? 120/100

= 16459 * 20/100 * 100/120

= 16450 * 20/120

I know this looks long but this is basically how they got the 20/120

Hope this helps! ????

nikki says

Car 16450… They say it’s vat inc… So that’s 120% (or 1.2 or 120/100)… Now to findt for 20%… U can do some cross multiplication.

120/100 = 16450

20/100 = ?

? = 16450 * 20/100 / 120/100

= 16459 * 20/100 * 100/120

= 16450 * 20/120

I know this looks long but this is basically how they got the 20/120

Hope this helps!

jsas8 says

Great lecture! OT