Deferred VAT Workaround

Deferred VAT Workaround

See attached document for complete details. 

The attached document provides a workaround for deferred VAT. 

In the provided example, the Base Case is analyzed with a typical upfront VAT with the remainder paid out by installments. Setup, amortization and booking entries are shown. 

The document then goes on to outline how to configure the equipment to suppress the VAT and add it to the 3rd months payment. 

The method illustrated: ยท
  1. Omits both the VAT Input and VAT Output GL movements
  2. Balance Sheet correctly stated
  3. This is more suited to Regulated HP and calculates the correct APR @ 5.15%
  4. Early Settlements prior to month 3 would correctly include the deferred VAT instalment





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