11 - value added tax Flashcards
what is output and input VAT charged on
output vat - sales
input vat - purchases
what are two examples of no VAT transactions
wages and dividends
what are three examples of exempt supplies
rent, insurance, postal services
what is meant by the future prospects test
a person must register for VAT if there is reasonable grounds that taxable turnover in the next 30 days will exceed the threshold
what is the historic test for VAT registration
if at the end of any month, the taxable turnover in the previous month exceeds thethreshold and then the person must register for VAT
why is deregistration compulsory
if a person ceases to make taxable supplies and has no intention of making them
when is the basic tax point
the date on which goods are removed or made available to the customer, or the date on which services are completed
what are the three adjustements that affect the basic tax point and what does the new tax point become
if payment is received before the BTP, actual tax point becomes date of payment
if an invoice is issued before the BTP, actual tax point is the date of invoice
if an invoice is issued within 14 days of BTP, actual tax point is the date of invoice
how do you treat goods supplied on a sale or return basis for tax points
tax point is the earlier of adoption of goods or 12 months after the date of dispatch
what does the value of the fuel scale charge mean
this is the value of the VAT inclusive fuel, so divide to get the value of VAT
how do you treat the VAT on goods used personally as well
deduct all the input tax and account for output tax in respect of private use
deduct only the business proportion of input tax
how long before registration can you recover input VAT
4 years
is tax on UK customer entertaining irrecoverable or recoverable?
irrecoverable
who qualifies as a substantial trader
someone with a VAT liability of more than 2.3 million annually
what must substantial traders do regarding VAT paymetns
make payments on account of VAT for each quarter
