Further Aspects of VAT (3) Flashcards
VAT treatment for UK VAT registered trader exports outside the UK?
Zero-rated sales
VAT treatment for UK trader imports (purchases) from outside the UK?
Account for rimport VAT on VAT return covering date the goods imported
Reclaim on same VAT return
How is VAT charged?
On goods imported from the UK and it used to be collected at the time of importation
What does postponed accounting mean?
VAT no longer has to be paid immediately at the part of enttry, but is declared on VAT return as output VAT. It can be reclaimed as input VAT on same VAT return
What does system prevent?
Goods being held at customs until VAT is paid and also improves cash flow
What is the general rule that supplies services to any business customer?
They are charged where the customer is erstablished/situated
What if a UK VAT registered trader is supplied with services from another country?
Place of supply is deemed to be the UK
What do UK trader accounts account for on supplies of services?
For output VAT on supply but the equivalent amount is input tax for the supply. SO transactionm is usually neutral
Supply of services from a UK vat registered to another business outside the UK?
Usually outside the scope of UK VAT as the place of supply is not in the UK
What can special schemes make?
VAT accounting easier and ease cash flow for certain types of trader
Who can apply for cash accounting scheme?
A trader whose annual taxable turnover does not exceed £1.35million can apply for it
When can trader only join?
If all returns and VAT payments are up to date
How can VAT be accounted for?
On the basis of cash paid and received, thus giving automatic impairment loss (bad debt) relief
WHen must a trader cease using the cash accounting scheme?
As soon as turnover exceeds £1.6 million
What must a trader continue to do after stopping the cash accounting scheme?
Trader can continue to bring outstanding VAT into account on a cash basis for a further six months after leaving the scheme
