All government grants should be built as a receipt subsidy and not as a factory or dealer option as they need to show below the line.
When building any vehicles the factory options must be at zero value as you can only discount prices and not remove. If you discount the factory option this will distort the discount given which can knock your grant figures out. The amount that needs to be entered on to you grant application should be the basis price of the vehicle minus any discount given, i.e Fleet/ friend and family / Motability discount, etc.
If the vehicle is on finance you may need to adjust the “amount to add to px” to accommodate the supplementary invoice and show the correct finance value on the main invoice. You will also need to remember to include the receipt Subsidy to this box as well.
Continue to add the Grant Ref i.e:- PIGC-012-033 as an accessory with zero value.
Most Manufactures pay the grant as a credit separate to the vehicle purchase, this is straight forward to process as you just need to post a Payment Receipt on the stock card and pay direct to bank.
Some Manufactures deduct the £5000 of the vehicle purchase invoice and this is not as straight forward for you to process.
You must post the full purchase invoice before the £5000 deduction as it is not a discount on the vehicle, it is just a contra payment i.e: you owe £15000 for a car, they owe you £5000 grant money, so they just take £10000 off you.
The full purchase price must be posted to keep VAT correct and the profit/loss of the vehicle correct.
Once the purchase invoice has been post you will then need to post a Receipt payment on the vehicle stock card and post it to cheque so it hits Nominal 126.96.36.199 (New Vehicle Banking Nominal). Then post a Nominal to Purchase Ledger Journal to the same P/L account were you have posted the vehicle purchase invoice. The final stage is to post the payment amount that has been taken out of bank.
Over the 3 entries on your P/L account this will balance correctly.