An Introduction to VAT (4)

Question 1

How is administration of VAT dealt with?

Answer 1

By HMRC

Question 2

What are local offices responsible for?

Answer 2

Local administration of VAT and for providing advice to registered persons whose principal place of business in their area

Question 3

When may a registered person will be visted by HMRC staff from a local office?

Answer 3

Ensure that law is udnerstood and is being applied properly

Question 4

What if a trader disagrees with any decision as to the application of VAT given by HMRC?

Answer 4

They can ask their local office to reconsider the decision

Question 5

What if HMRC believe that a trader has failed to make returns?

Answer 5

They believe those returns to be incorrect or incomplete, they may issue assessments of VAT due to the best of their judgment

Question 6

What is the limit for assessments of VAT?

Answer 6

Normally four uears after the end of a VAT period, but extended to 20 years in case of fraud

Question 7

How must a trader appeal to tax tribunal for VAT?

Answer 7

In the same way as an appeal may be made for income tax and corporation tax

Question 8

What is the VAT period?

Answer 8

Usually three months. Where return shows total input and output tax for the tax period

Question 9

VAT periods and applying for registration?

Answer 9

A trader can ask for VAT periods which fit in with their own accounting year

Question 10

What happens if a registered person whose input tax will regularly exceed their output tax?

Answer 10

They can elect for a one-month VAT period, but will have to balance inconvenience of making 12 returns of year

Question 11

For VAT periods starting on or after 1 April 2019?

Answer 11

Businesses VAT registered must following Making Tax Digitial rules

Question 12

What must a digital record which contains details of the supplies the business makes and supplies include?

Answer 12

Time of supply

Value of supply

VAT rate charged or input tax reclaimed

Question 13

Businesses who don’t follow making tax digital rules?

Answer 13

Continue to submit their returns electronically through HMRC website

Question 14

What happens once a trader’s total VAT liability for 12 months or less to end of a VAT period exceeds £2.3 million?

Answer 14

Trader must start making payments on account of each quarter’s VAT liability during each quarter

Question 15

What are the two payments on account of each quarter’s VAT liability?

Answer 15

One month before the end of the quarter

Due at end of month which is final month of the quarter

Question 16

What is the amount of each payment on account made during the quarter?

Answer 16

Is 1/24 of trader’s annual VAT liability in the period in which threshold is exceeded

Question 17

What is ignored when calculating the payments on account (but not for the purposes of £2.3 million threshold for entry into the scheme)

Answer 17

A trader’s VAT due on import from overseas is ignored

Question 18

What if the VAT liability for the quarter exceeds total of the payments on account?

Answer 18

A balancing payment is due one month after end of quarter to bring total payments for that quarter to amount of VAT liabiltiy

Question 19

What if the VAT liability for the quarter is less than total of the payments on account?

Answer 19

HMRC will make a repayment to the trader

Question 20

When msut a quarterly VAT return be submitted?

Answer 20

The last day of the relevant month