7 - Indirect Tax

Question 1

How many days must Stamp duty land tax be paid in?

Answer 1

Must be paid by purchase within 14 days of completion date

Question 2

Do you pay SDLT on fixtures and fittings?

Answer 2

No

Question 3

What is SDLT based on?

Answer 3

True value of the property

Question 4

Second home or BTL SDLT rate

Answer 4

Surcharge of 3% on £40k+ property value

Question 5

Non-UK residents SDLT and non residential properties

Answer 5

Non UK - Surcharge of 2% on purchases £40k+

Non residential - Additional bracket of 2% on prices between £150k - £250k

Question 6

If you purchase a second property and have paid surcharge but this property is a replacement and old property sold can you reclaim SDLT?

Answer 6

Yes, can reclaim providing original property sold within 36months

Question 7

FTB SDLT exemption

Answer 7

£425k - £625k

Question 8

SDLT for rent on resi. & commercial

Answer 8

Resi. - 1% on amount over £125k

Commercial - 1% on amount over £150k upto £5m then 2%

Question 9

When must a company register & can deregister for VAT? And when must notify HMRC to register

Answer 9

Register - £85k limit if taxable supplies

Deregister - £83k limit if taxable supplies

Have 30 days from end of month limit was exceeded to notify HMRC

Question 10

Output VAT & Input VAT

Answer 10

Output VAT - company sells clothes to customer and charge VAT on clothes

Input VAT - company buys materials to make clothes and company pays VAT on material

Question 11

Can any excess input tax be reclaimed?

Answer 11

Yes

Question 12

Why would a company register for VAT if not yet made £85k limit?

Answer 12

As can reclaim excess input VAT

Question 13

Categories of VAT

Answer 13

Exempt supplies - e.g. insurance, finance, health

Zero rated supplies 0% - e.g. food, domestic supplies, books

Reduced rate supplies 5% - e.g. fuel, certain property renovations

Standard rate supplies 20% - e.g. catering, warm cooked food

Question 14

How often is VAT paid for most companies?

Answer 14

Quarterly

Question 15

What is VAT flat rate scheme?

Answer 15

A small business (annual turnover of no more than £150k - 230k) pays a flat rate on INPUT VAT ONLY is not offset against output VAT and there is a flat rate of 16.5% used

Question 16

Cash accounting scheme

Answer 16

Enables smaller business (max taxable supplies or £1.35m per yr) to pay VAT when customer has paid trade rather than when invoice raised. Can use until hit £1.6m turnover

Question 17

Bad debt relief

Answer 17

Customers can claim VAT relief if paid VAT at point of invoice and debt is atleast 6months over due and has been written off by the business

Question 18

When is VAT typically paid (excluding cash accounting)?

Answer 18

Every quater unless large company who pays monthly

Question 19

Second hand goods pay VAT based on what?

Answer 19

VAT only paid on difference between price paid and price sold

Question 20

Stamp duty and stamp duty reserve tax on shares

Answer 20

Stamp duty - Paper

SDRT - Paperless

Question 21

Stamp duty and stamp duty reserve tax tax rate and exemptions

Answer 21

Tax rate of 0.5%:
- Paper - rounded to nearest £5
- Paperless - rounded to nearest penny

Transactions under £1k exempt from stamp duty (paper) only

Question 22

For SDLT on a property purchase do you pay the rate which you are in for all income or pay amount for each tier of income bracket?

Answer 22

Pay % of purchase price for each income tier

Question 23

Is stamp duty and stamp duty reserve tax paid on purchases and sales?

Answer 23

No, purchases only