Extras And Things I Got Wrong In Tests Flashcards
Output
Sales and all other outputs EXCLUDING vat
Input
Purchases and all other inputs EXCLUDING vat
How many VAT returns per year:
Flat rate scheme.
Cash scheme
Annual accounting scheme
Flat rate scheme. (4)
Cash scheme (4)
Annual accounting scheme (1)
When calculating turnover amount for registration what to remember…
It’s ‘taxable’ supplies… this includes zero-rated supplies
Flat rate scheme - how to calculate?
Total (Vat inclusive) Sales x flat rate.
Do not deduct zero-rated supplies
(Do not deduct input amounts)
When dealing with over and under payments from previous returns … what to do ?
Underpayment - Box 1
Overpayment - Box 4
Both …. net off figure first and then treat as under/overpayment as appropriate.
What to remember about Box 2
Even though it comes under Box 1 sales …
This is about ACQUISITIONS.
(In one practice I calculated VAT and put EC sales here..)
We only use notional vat on EC purchases
Box 1 - Vat due on EC purchases that are Services (gets added to our
sales vat figure so is hidden)
Box 2 - Vat due on EC purchases of Goods (and related costs like deli)
This is the only amount in box 2
Box 4 - This is the reclaiming amounts and we add both the EC amounts
from above here so they cancel each other out.
What to remember about simplified vat invoice
Cannot issue if there are ANY exempt supplies included
Does a proforma need to show suppliers VAT number?
YES
Tax point date for goods supplied to another business in the EU
The earlier of the date on the invoice or the 15th of the month following the month of supply.
In the flat rate scheme how to calculate amount..
Take total turnover…
Including VAT
including EXEMPT !!!!!
Multiply by applicable flat rate.
(Remember to check if it’s limited cost biz)
Limited cost business if…
Expenditure on goods INCLUDING vat is …..
Less than 2% of turnover INCLUDING vat.
Or
Less than £1000 p/a (including vat) so £833.333333 net.
MTD for periods …
That STARTED on or after 01 April 2019
Bad debt relief … what to remember?
My instinct is put it in box 1 if correcting a wrong sales amount..
This is wrong … must think of it as a RECLAIM and put in box 4.
Look out for wording
Acquisitions for EU purchases / Imports for outside EU
EU despatches for EU sales / Exports for outside EU sales.
.
Watch out for a question about a changing VAT rate…
Read carefully …
Remember don’t have to change prices to customers … can pocket or absorb the difference in vat amount.
Really need to watch for silly mistakes
We put too much input tax on prev (decimal place error) but I added instead of deducting the correction to next periods return.
I got a due date wrong… put 7th of the month immediately after the period end instead of adding a month plus 7 days…
Flat rate scheme how to check eligibility
TAXABLE turnover (excluding VAT) must not exceed £150k
If didn’t register for vat on time and now have to back pay on sales … how to handle?
Treat the sales as having been VAT inclusive and so divide by 6 (assuming they were standard rated)
Really watch corrections in VAT returns… what to remember?
Seems inconsistency eg. Told missed some purchases last return so I corrected box4 …. but Osborne answer also corrected box 6
One comment on forum indicated there will be no ambiguity in exam…
If you’re correcting a previous period just adjust box 1 and 4..
If it’s in the current period correct all the boxes.. eg the example where a van was sold (with vat correctly charged) but gross amount was entered as a sale. I believe if it was a previous period would just have adjusted box 1 to add the vat…. but if in this period need to adjust box 6 downwards by the vat amount also.
Need to read up on invoicing on Continuous basis
.
From Osborne practice 3 task 6 it appears when you buy something eg a car that you can’t claim vat on you still on,y put the net purchase price in box 7 …. you do not ‘pretend’ there was no vat and put the gross in. I correctly adjusted box 4 downwards to not claim vat on a car but I also adjusted box 7 upward by the same amount which was wrong
.
Got to be so so so careful with corrections!
What to really watch out for?
I was correcting a Credit note from a supplier and treated it as an invoice…
Really need to check check check for this and not make really stupid mistakes!
Failure to register = a business reached threshold 2 months ago and hasn’t registered
Civil penalty or Late registration penalty depending on which bit of ref material you read.
There are 2 bits in the ref material.
6.4 Failure to register. (In the registration section)
A biz which fails to register when it is required to do so may face a civil penalty.
20.5 Penalty for late registration. (In the penalties section)
Failure to register for vat with HMRC at the right time may make a business liable to a late registration penalty
Only companies have to register for MTD
False
When calculating businesses taxable turnover what to include/ exclude?
Include standard, reduced and zero (remember zero is taxed at zero %)
Exclude exempt.
Keep slipping up on credit notes from supplier … worth a check through my exam specifically to check this point ….
.
How to treat a reference in exam to a ‘deposit paid to a supplier’
As if it was an invoice from a supplier
From AAT ass 2
Biz operating flat rate … if it changes its business type ?
Flat rate must be changed to appropriate.
Ie it does not revoke immediately
In exam …. final checks
WATCH out FOR SNEAKY tricks
Credit notes from suppliers !!
CHECK didn’t put PENCE in boxes 6-9 !!!!!
DOUBLE-CHECK SUMS
Write out content of VAt return boxes so can double-Check sums… in one practice I made a silly error just by adding purchases returns vat to purchases vat instead of subtracting it….. could have picked up this error easily.
Really check WORDING
Use the REFERENCE … remember might be more than 1 bit relevant eg. With failure to register example.
Services supplied on continuous basis over period in excess of a month but invoices are being issued regularly throughout the period
A tax point is created every time an invoice is issued or a payment is made, whichever happens first.
