CH23 - VAT

Question 1

Registration: Historic Turnover and Future Prospects Test

Answer 1

Future Prospects: Within next 30 days £85k, notify HMRC by end of 30 days, Reg starts in the 30 days

Question 2

Historic Turnover: Last 12 months or since trading £85,000

Answer 2

Notify HMRC within 30 days EOM of exceeding, Notify HMRC 1 month later
Reg effective first day of the second month after exceeded
Don’t need to register if within the next 12 months suppliers expected to go below £83k

Question 3

Recovery of pre-registration input VAT

Answer 3

Goods: Still in inventory, acquired within four years prior to registration. e.g. 40% of inventory
Services: acquired within 6 months prior to reg

Question 4

Exempt supplies

Answer 4

Rent
Land
Insurance premiums
Financial services: loans, HP, share dealing, banking
Education from schools and university
Healthcare
Sports

Question 5

Deregistration

Answer 5

30 days of closing down
Immediately if turnover expected to be less than £83k
Happens immediately

Question 6

Sale of Business

Answer 6

Normal business: Output VAT on assets transferred
Going concern: No

Question 7

Tax point

Answer 7

Goods: time of made available to customer (dispatch)
If tax invoice issued prior, this is tax point
If issued within 14 days, that is also tax point
Services: when performed

Question 8

Tax point: sale or return

Answer 8

Earlier of: goods adopted by customer, or 12 months dispatch
Continuous goods: payment received or tax invoice issued

Question 9

Can’t recover input VAT

Answer 9

UK suppliers and clients
Cars unless 100% business or leased and have private use (50% only)

Question 10

Car expenses

Answer 10

Can reclaim even if some private use on running of car, fuel repairs etc
If fully paid for by the employee - output VAT payable on fuel reimbursed