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Mortgage expenses with VAT

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Geordie613
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Sage Version: v2018 24 UK/Europe/Africa

Mortgage expenses with VAT

Post by Geordie613 » 31 Aug 2016, 16:36

A client has taken a big loan from a mortgage provider to finance some development work on a property he owns. I have been using the article on the Sage website entitled "To record the purchase of a property using a mortgage in Sage Accounts" as a guide to setting up a journal to enter it.

For the fees for the company providing the Capital, i have been provided with a VAT invoice. But the Sage guide shows a debit entry under N/C 7603 (Professional Fees) for Mortgage arrangement / setup fees with a T2 tax code.

Dummy Completion Statement

N/C Details: credit Debit
2300 Mortgage amount 280,000.00 cr
7903 Set up Fees and 1 months interest) 10,000.00 dr
7604 lender's solicitors fees (inc VAT) 2,140.00 dr
7604 HMLR fees 40.00 dr
8204 no search' insurance premium 44.00 dr
1200 Cash deposited 267,776.00 dr

Totals 280,000.00 280,000.00

How do I enter it if VAT is involved in this case, in the 'lender's solicitors fees' of 2,140?
"Difficulties mastered are opportunities won."
Sir Winston Churchill

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brucedenney
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Posts: 4021
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Sage Version: v2017 23 UK/Europe/Africa

Re: Mortgage expenses with VAT

Post by brucedenney » 01 Sep 2016, 09:24

There are many ways...

Code: Select all

Transaction      N/C Details                                       Net Amount  
JC              2300 Mortgage amount                               280,000.00      
JD              7903 Set up Fees and 1 months interest)             10,000.00 
JD              7604 HMLR fees                                          40.00 
JD              8204 no search' insurance premium                       44.00 
JD              7604 lender's solicitors fees (ex VAT)               2,000.00 
JD              2201 lender's solicitors fees (VAT)                    140.00
JD              1200 Cash deposited                                267,776.00
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Geordie613
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Posts: 36
Joined: 03 Feb 2015, 17:31
Sage Version: v2018 24 UK/Europe/Africa

Re: Mortgage expenses with VAT

Post by Geordie613 » 05 Sep 2016, 12:39

Is it that simple? Thank you very much.
I had another issue with entering the Solicitor fees invoice. My thinking is that it shouldn't even come into question, because it is not my client's invoice, rather it is his lender's invoice and just comes out of the amount that actually goes into the bank. (Now that I've put that in writing it sounds like I've answered my own question.)

Would you agree?
"Difficulties mastered are opportunities won."
Sir Winston Churchill

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