Communication Internally, With Clients And With HMRC

Question 1

What are the 2 main methods of communicating about VAT internally or externally?

Answer 1

1. Letter
2. Email

Question 2

If you are submitting VAT returns on behalf of a client, it is important that you ask them to check the figures and give their ___ before making submissions. Ultimately, ___ ___ is responsible for the accuracy of the information.

Answer 2

• Authorisation
• The client

Question 3

The payroll department will need to be notified of their ___ ___ and payment deadlines.

Answer 3

Reporting requirments

Question 4

Describe what happens when there are changes in legislation

Answer 4

If there has been a change to VAT or tax legislation, or a regulatory change (such as Brexit), HMRC needs to inform businesses and consumers.

Question 5

What are the methods of communication used by HMRC to communicate changes in legislation (4)?

Answer 5

1. Letter or email to every VAT-registered business
2. Letter or email to every VAT-registered employer
3. The gov.uk website
4. Television, radio, or social media

Question 6

Describe what occurs when VAT rate changes

Answer 6

• With reference to the tax point, businesses must ensure they are using the correct %.
• Changes in VAT rate also impact the consumer as they are the ultimate bearer of the cost. They should be notified of a VAT rate change.
• Sometimes business will choose to keep prices the same to the consumer and bear the cost of the price differential themselves (cynically most likely when the VAT rate goes down).

Question 7

Describe the process of keeping up to date with VAT and payroll

Answer 7

• Each business must ensure they are up-to-date with the relevant VAT and payroll rules and regulations affecting their business and ensure the are communicating any changes effectively to relevant members of staff.
• Members of AAT are required to undertake CPD (continuing professional development_ either through privately arrange courses and self-learning via AAT seminars/meeting, reading HMRC website, or attending workshops and courses run by HMRC.
• Also check software updates to ensure the correct rates, allowances, and rules are being followed/or manually check a sample of calculations.

Question 8

When providing info to HMRC on behalf of your employer or clients, it is important to act in __ __ and exercise care over the __ of your response to HMRC.

Answer 8

• Good faith
• Accuracy

Question 9

What are the 2 stages of of finding answers to questions regarding HMRC?

Answer 9

First option – website, the comprehensive VAT 700 is available online along with supplementary notices, help sheets, and guidance.

Second option – if info is not available or unclear from website, then contact HMRC e.g., by phoning the HMRC enquires helplines where most questions can be answered.

Question 10

Why might the taxpayer need to write to HMRC?

Answer 10

If published info from HMRC is not sufficient to answer a query, or that the enquires helpline has suggested it, or there is uncertainty on how to treat VAT in a complex transaction.

If the written query is one that HMRC has already produced published info on, they will respond to the taxpayer giving guidance on how to locate the information.

Question 11

Describe visits from HMRC

Answer 11

• They will visit businesses from time to time to inspect records and ensure VAT and payroll taxes are being calculated correctly.
• Usually they will arrange a time to visit the business but they can arrive unannounced if they wish.
• If they find there has been an underpayment of VAT/tax then they will raise an assessment requesting payment of the relevant amount. The taxpayer has the right to appeal against any assessment.

Question 12

What are the 5 fundamental principles of the AAT?

Answer 12

1. Integrity (straightforward and honest)
2. Objectivity (no bias or undue influence)
3. Professional competence and due care (maintain professional skill and knowledge_
4. Professional behaviour (comply with laws and regulations)
5. Confidentiality (don’t disclose private info)

Question 13

What fundamental AAT principle is particularly important regarding tax?

Answer 13

Confidentiality - in accordance with law, client’s info should not be disclosed unless tax practitioner has the written authority or permission to do so, or is required by the law (e.g., if HMRC makes a formal request or money laundering is suspected).