Chapter 3: Inputs and Outputs Flashcards
how do you calculate VAT?
net amount * 20%
how do you calculate VAT on a gross amount?
gross amount * 1/6
can you reclaim VAT on a staff party with employees?
yes
can you reclaim input VAT on private use cars?
no
how do you reclaim VAT on a car used for private and business purposes?
use the fuel scale charge.
what is a partially exempt trader?
a business who sells taxable supplies and exempt supplies
how does a partially exempt trader calculate how much input VAT they can reclaim?
input VAT not value of taxable
directly attributable x supplies made /
to taxable or exempt total supplies
supplies made
the rest of the input VAT is only recoverable if it is below the _______________ .
de minimis limit
how much is the de minimis limit?
£625.00 and is less than 50% of total input tax for the period.
where are goods deemed to be supplied from?
where they ‘originate’/ start their journey
where are services deemed to supply from?
-if it is to a registered BUSUINESS customer,
then the supply is where they are located.
-if it is to non-registered businesses or
consumers then the supply is the seller’s
country
what are exports?
GOODS supplies to overseas customers
what VAT applies to exports for GOODS?
they are zero-rated.
what VAT rule applies for SERVICES that are exported?
UK VAT rules apply if the place of supply is the UK.
what are imports?
goods brought from overseas countries
what VAT rules apply to imports?
-no VAT is charged by the supplier
-when goods enter the UK, the purchaser has to pay the applicable VAT amount
what is the reverse charge?
the seller does not charge VAT on the invoice. Instead, the buyer is responsible for calculating the VAT due on the transaction and reporting it in their own VAT return. (written as output tax)
what is postponed accounting?
a way for UK VAT-registered businesses to account for import VAT after Brexit. Businesses can record the VAT on their VAT Return rather than paying it immediately upon entry of the goods into the UK.
what is the reverse charge?
applies to all purchases of services from overseas suppliers by business customers
