Business VAT Flashcards
When is VAT incurred?
Supply of goods/services made in UK
Taxable supply
Taxable person
In course or furtherance of any business carried on by that person
In what 2 circumstances does a person need to be VAT registered?
At end of any month, value of taxable supplies in period of 1y or less exceeds VAT threshold
OR
Reasonable grounds for believing value of taxable supplies in a period of 30 days will exceed VAT registration threshold
What is the current VAT registration threshold?
90k
Why might someone want to voluntarily register for VAT if they are below the threshold?
So they can recover their input VAT (e.g., the vat the company pays when they buy paper, heating etc)
When can you deregister for VAT?
When your taxable supply will not exceed the VAT deregistration threshold
What is the deregistration threshold?
88k
What is the VAT standard rate?
20%
What is the formula to calculate how much VAT is in a VAT inclusive price given to you?
Tax rate / (100 + tax rate) =
What is the reduced rate of VAT?
5%
What are common items that incur reduced rate VAT?
Domestic heating and power
Installing mobility aids for elderly
Smoking cessation
Childrens car seats
What common items are 0 rated VAT?
Some food
Sewer/water
Books/newspaper
Talking books for blind
New houses/their construction
Public transport
Children’s clothing
Can businesses selling 0 rated things still claim returns on their input VAT?
Yes
What common supplies are VAT exempt?
Insurance
Finance
Education/health services
Sale of land and business
Can a business selling VAT exempt things claim back their input VAT?
No
What is the deadline to supply a VAT invoice when 1 company is buying from another?
30 days
