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Tax processes for businesses (finance act 2023) > Communicating VAT and Payroll information > Flashcards

Communicating VAT and Payroll information Flashcards

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1
Q

Who will VAT reports be checked by to ensure accuracy, if working for a business (industry) ? P145

A
  • Senior member of staff, owner, manager
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2
Q

Who will the accountant need approval from relating to VAT submission , if they are working for an accountancy practice ? P145

A

Client

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3
Q

Where will the accountant advise of the amount due to the HMRC on the VAT return ? P145

A
  • Box 5 - draft VAT return
  • date to be paid
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4
Q

What must happen with the wage reports and payroll in relation to reporting information to the relevant person ? P145

A
  • appropriate person e.g. accountants - year end accounts
  • approval before payroll submission / payment to employee, HMRC, pension providers , trade unions
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5
Q

What can happen to a business if it does not effectively communicate the time limits relating to submission of info / payments to the HMRC ?

A
  • significant penalties and fines
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6
Q

What are payroll submissions made in ? P146

A
  • RTI submission
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7
Q

Why is the timing of vat payments important for the cash flow of the business ? P147

A
  • Quarterly submission - one month and 7 days
  • payment collected - three working days
  • prompt payment invoices = working capital
  • Look at example
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8
Q

What effect does efficient payment of VAT have on the cash budget business ? P148

A
  • Consider:
  • output monthly cash inflow + quarterly payments monthly cash outflow = time between inflow and making payment = increased bank balance
  • further improivement = tighter credit control
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9
Q

Aside from the VAT act 1994 , where else do the principles of VAT law originate from - 1st place P150

A
  • Statutory instruments - rules and regulations
  • authority of Acts of Parliment
  • No passing an Act of Parliament
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10
Q

Aside from the VAT act 1994, where else to the principles of VAT law originate from - 2nd place ? P150

A
  • VAT notices
  • www.gov.uk
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11
Q

When are changes in VAT regulations most importantly change ? P150

A
  • Period following budget
  • ALSO VAT rates Variation - time to time
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12
Q

How do VAT rate chnnages affect the running of businesses ? P150

A
  • Output tax calculation
  • total prices - invoices, credit notes, price lists, price labels
  • rate change timing = input claim effect
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13
Q

How do changes in the types of goods and services subject to VAT affect running of the businesses? P150

A

Extension - reduced rates

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14
Q

What is an exampe of payroll legislation that changes every year ? P151

A
  • National minimum wage
  • National living wage
  • employers must pay appropriate
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15
Q

What is the most common and far reaching change to the VAT system ? P151

A
  • Change - VAT rate
  • zero rate = no change
  • reduced rate = rare change
  • standard rate = subject to change
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16
Q

What are the main reasons for a governnments to change the VAT rates ? P151

A
  • Consumer spending in economy - e.g. increase = discouragment
  • increase tax revenue = funding government spending
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17
Q

Dealing with VAT Standard rate change - what if the change takes effect on 1st April , and the customer pays after 1st April for goods received prior to this date? P152

A
  • Sale before
  • Original (lower) rate applies
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18
Q

Dealing with VAT Standard rate change - what if the change takes effect on 1st April , and the business issues a VAT on or after 1st April for goods supplied before the date ? P152

A

Business can choose - earlier lower rate

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19
Q

Dealing with VAT Standard rate change - what if the change takes effect on 1st April, and the vusiness provides services that started before 1st April but finish after 1st April ? P152

A
  • Work done to 31st March = invoice lower rate
  • Work done after 31st March = invoice higher rate
20
Q

Dealing with VAT Standard rate change - what if the change takes effect on 1st April, and the business provides a continuous service such as leasing office space? P152

A
  • Account VAT due - earlier of issues / receives payment
  • higher rate charge - after 1st April
21
Q

Dealing with VAT Standard rate change - what if the change takes effect on 1st April - how should businesses claim back the VAT charged by their suppliers ? P152

A
  • normal way
  • invoice received after rate for purchases before = VAT at original (lower) rate
22
Q

How would a business using cash accounting scheme be affected by changes ?

A
  • declare to hmrc based on payment received
  • identify sales before changes
  • charge vat on sales before 1st April - VAT lower rate
23
Q

How does a business using a flat rate scheme deal with chages tro the scheme ? P153

A
  • Revised percentage
  • use - after change in standard rate
24
Q

How does a business using the annual accounting scheme deal with changes to VAT scheme ? P153

A

No chnage
payment of instalments

25
Q

Who needs to know about VAT rate rise ? P153

A
  • HMRC - advance notification
  • notify staff
  • notify customers
26
Q

Why is it important to advise a customer in advance of changes in the VAT rate ? P153

A
  • Motivation - buy more, pay less
  • avoidance - annoyance and confusion
27
Q

When VAT rate changes are announced in advance what should the business make plans for ? P153

A
  • informing employees
  • adjusting to computerised accounting software
28
Q

Where are the main areas of the business that will need to know about the changes in VAT rates P153/P154

A
  • Accounting and finance people - day to day transactions
  • Accounting and finance people - financial forecasts
  • markerting, sales, customer service staff - advice on price lists
  • shop, floor, warehouse staff - physically pricing goods - stickers
29
Q

If there should be a chnage to the reporting error threshold on previous returns, who should know ? P155

A
  • Employee - compilation and authorisation VAT return
30
Q

Who else needs to be told of any reporting errors in previous VAT returns ? P155

A
  • Appropriate management
  • correction in current
  • OR
  • Significance = separate disclosure
  • penalty and surcharges - failure to dsiclose
31
Q

What are other ways that a accounting scheme may be modified ? P155

A
  • Turnover limits raised
  • flat rate percentage adjusted
32
Q

What must a business do if there are changes to special schemes, or what can they do ? P156

A
  • Review worth staying
  • annual turnover limit = business withdrawal
33
Q

What are the 5 ethical principles within accounting to be concerned with ? P156

A
  • Integrity
  • Objectivity
  • Professional competence and due care
  • Confidentiality
  • Professional behaviour
34
Q

What must all VAT and payroll work be carried out with ? P156

A
  • integretiy and objectivity
  • confidentiality of personal data processed
  • technical knowledge - highest degree - Professional competence
35
Q

How can an accountant’s integrity and objectivity be threatened ? P156

A
  • Pressure - allow irrecoverable VAT - business’s VAT Return
  • must - straightforward and honest
  • e.g.:
  • claiming back VAT on purchase of a car
  • payment - cash in hand - no cash deductions
36
Q

Why must an accountant be professionally competent and act with due car ? p157

A
  • aware - relevannt legislation and regulation
  • failure = penalities and/or fines
  • Maintainenace = CPD
  • CPD= Job training , attending courses
37
Q

How does an accountant uphold professional competence and due care if thye have a query about VAT and Payroll beyond their own expertise ? P158

A
  • Line manager referral - appropraite knowledge and expertise
  • not deal with themselves
38
Q

What is confiendeitality in the scope of professional work ? P158

A
  • Non disclosure = unauthorised people
  • Without proper and specific authorisation
  • sensitive and confidential info - business and employees
39
Q

What is professional behaviour in the scope of accounting for VAT ? P158

A

No disrepute - not acting unprofessionally
comply with VAT and payroll legislation

40
Q

When may the business need to contact the HMRC ? P159

A

VAT and Payroll issues

41
Q

What options does the HMRC give for answering questions regarding VAT and Payroll ? P159

A
  • Website communication
  • Email
  • Telephone
  • Post
42
Q

How would the business retrieve an answer to a query online ? P159

A
  • www.gov.uk - search facility
  • queries of business
43
Q

Can a business email a query to the HMRC?P159

A
  • Yes
  • Restrictive - number of security processes clearing
44
Q

How would the business seek the answer to a query from the telephone ? P159

A
  • telephone
  • longer than email - busy times - tax/payroll cycles
45
Q

What if the business has a problem retreiving an answer from online, telephone, and email ? P159

A
  • Writing a letter
  • Uncommon - unless some situations

Tax processes for businesses (finance act 2023) (6 decks)

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