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kendal-sharp
January 4, 2022
Solved

VAT Code for Bounce Back Loan Repayments?

  • January 4, 2022
  • 1 reply
  • 1 view
Just wondering what VAT code to use against our bounce back loan repayments that have started? Also wondering whether I need to be showing any interest elements of the repayment separately within the payment? I have the loan as a liability account on the balance sheet and obviously overall we will be paying back more than we received? Thanks
Best answer by paul72

Hi @kendal-sharp 

 

The loan & repayments are outside the scope of VAT - so NO VAT code.

 

As for the interest, I'd post that to a separate expense account (there's a standard Interest Paid option inside Expense when you go to New in the Chart of Accounts).

Each repayment can be split on two lines - one going to the liability account, the other going to interest expense.

 

Hope that helps.

1 reply

paul72
paul72Answer
Level 6
January 7, 2022

Hi @kendal-sharp 

 

The loan & repayments are outside the scope of VAT - so NO VAT code.

 

As for the interest, I'd post that to a separate expense account (there's a standard Interest Paid option inside Expense when you go to New in the Chart of Accounts).

Each repayment can be split on two lines - one going to the liability account, the other going to interest expense.

 

Hope that helps.

    K
    kendal-sharpAuthor
    January 7, 2022

    Amazing, thought that was the case :)

    Thank you!

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