Chapter 2 Flashcards
When must a VAT registered business send a VAT invoice to its purchaser ?
Within 30 days of the earlier of the date of supply or receipt of payment
What invoices are not VAT invoices ?
Invoices that are for zero-rated or exempt supplies only
When can a simplified VAT invoice be issued to a buyer ?
When the VAT inclusive amount charged is £250 or less
What can a simplified invoice NOT include ?
VAT exempt supplies
What is a modified invoice ?
A VAT invoice but also includes the vat inclusive price of the products
What is a basic tax point for goods ?
The date that the business despatched the goods to the customer or the customer collects them
What is the basic tax point for services ?
The date that the service is carried out or the date when all the work is completed
What is the actual tax point 14 day rule ?
If an invoice is issued within 14 days of the basic tax point, the invoice date becomes the actual tax point
What is the actual tax point for advanced payments?
The earlier of: The date the VAT invoice is issued OR the date the business receives the advance payment
What is the actual tax point for deposits ?
The earlier of: The date a VAT invoice is issued for the deposit OR the date the deposit is received
Can you use a pro-forma invoice as evidence to reclaim VAT ?
No
What does HMRC allow businesses to do in terms of VAT rounding ?
It allows them to round down the total amount of VAT payable on an invoice down to the nearest penny
If an invoice has a trade discount what does HMRC require you to do when calculating the VAT ?
Calculate the VAT after the trade discount has been deducted
What is a tax point ?
The date on which the supply is recorded for the purposes of the VAT return
