Is it possible to apply 50% VAT to an invoice from a vehicle lease company. If so how do I do this please?

You can create an invoice and set it to have a 50% VAT in a few easy steps, @nicolabrown.

You'll need to activate VAT from your account. This should, thereafter, populate automatically on the invoices. 

To set up your VAT, follow these steps:

1. From the left navigation bar, choose Taxes.
2. Click the Edit VAT drop-down then click Edit Settings.
3. Make necessary changes and then enter the VAT registration number.
4. Click Save

Once done, create a 50% VAT:

1. Go to Taxes and select Add Tax.
2. Select the type of tax you want to add.
3. Provide all the necessary information.
4. Click Save.

You can go back to your invoices page and create a new one. Enter the 50% VAT on the VAT column.

1. Select + New and then Invoice.
2. Provide all the necessary information.
3. Select a VAT rate.
4. When you're ready to send the invoice, select Save and send.

Check these articles for more information: 

• VAT: Getting Started
• Set up and edit VAT settings, VAT codes, and VAT rates
• Create invoices in QuickBooks Online

Please let me know if you have any follow-up questions in creating your invoices, and or other questions. I'm here to help. Have a good one.

I think what the OP meant is, is it possible to charge VAT on only 50% of the invoice.

When leasing a company car in the UK and using the car for personal use, you are only allowed to claim VAT back on 50% of the lease price.

Example

Car lease is £200 a month VAT at 20% on that would be £40, but you are only allowed to claim VAT on half of the amount so £100 is 0% vat and £100 is 20% vat.

How do you account for this in QB

Hi @mdj101 

The easiest way would be to split the transaction into two lines.

Line 1 : Business Use VAT=20%

Line 2 : Private Use VAT=0% (or NoVAT)

By this method, you can categorise the business/private use amounts separately.

Hope this helps. 

Thanks Paul for your reply.

We use AutoEntry to import the invoices and what I did was created a new VAT for 9.090% for car lease.

This then accounted for the vat at the correct ammount. Not sure if this is right or not?

Hi @mdj101 

That will certainly give the correct VAT amount (using your example above, £20 VAT reclaim from £240 total) but I'm not sure it's right.

By creating the 9.090% VAT Code, you're moving the £20 unclaimed VAT into the lease paid.

The bill will be £200 plus £40 VAT but your entry in QBO will be £220 plus £20 VAT.  This means that you're claiming an extra £20 as an expense against tax instead of paying it personally.

To be perfectly honest I don't know the rules around private use but this doesn't sound like something that HMRC would accept.  My guess is that you need to separate out 50% of the lease and 50% of the VAT to pay personally.