Green Light Tests Flashcards
Latest date a supplier can issue a VAT invoice?
Within 30 days of Tax Point
Watch out for … when giving date for required VAT registration…
It is 30 days.
Not EOM following.
Multiple choice answers may include eg 30/07 and 31/07 so GET IT RIGHT no SILLY MISTAKES
For Flat rate scheme taxable turnover must not exceed ?
£150K
Annual accounting scheme … when is due date?
2 months from end of VAT period.
This time it is an EOM type date
What is the future turnover method
Must register within 30 days of exceeding the limit (past turnover method), or if it is likely to within the next 30 days. (Future turnover method)
VAT invoice must show
Total amount payable excluding VAT.
VAT Registration Number of Seller.
Rate of any PP discount.
Customer collects goods on 01/08 and biz issues invoice on 10/08. What is Tax Point?
10/08
The invoice date. because it’s issued within 14 days it becomes Actual Tax Point.
Customer pays on 02/07 ;
supplier sends goods 09/07.
Supplier issues invoice on 15/07
What is Tax Point?
02/07 - Date of payment.
Because it was received in advance of goods being supplied and invoice being issued.
Customer pays on 02/07 and supplier sends on 09/07.
What is latest date for issuing VAT invoice?
31/07.
Within 30 days from Tax Point. (Tax point day is ‘Day 1’ for counting purpose.)
When using the Cash accounting scheme for VAT. What to remember about part payments?
Means tax may be included in more than one period.
Just take the payment dates (not invoice date since this is CASH scheme) and the relevant tax must be included in the relevant period..
Edwin sells standard rated goods and in the next 30 days expects the annualised value of supplies to be £90k in the next 30 days alone
Yes. register
Reasons for voluntary registration.
Taxable supplies are zero-rated and related purchases are standard. (Publisher)
Biz paid for major project eg refurb
On set up of biz lots of initial cost and not much sales.
Deregistration voluntary
Last 12 months below current deregistration threshold of £83k.
Must notify HMRC of date wish to deregister but must charge vat until receives confirmation.
Deregistration compulsory
- biz ceases or intends to cease making taxable supplies.
- biz is sold
- Legal status of biz changes, eg sole trader registers as ltd company.
Normally businesses pay VAT quarterly on standard rated sales.
(Regardless of customer payment)
Input VAT can be reclaimed even if payment has not been made.
.
Due date for payment and submission is 1 month after end of period. Increased by 7 days if submitted online and pay electronic.
DD is taken 3 days later whereas Bacs has to hit by 7th
.
Cash accounting scheme
Estimated taxable turnover < £1.35 million.
Can be used until turnover reaches £1.6 million.
Relates to payments received and paid.
Due date same as normal.
No adjustment for bad debt as relief is automatic
Annual accounting scheme
Estimated taxable turnover < £1.35 million.
Can be used until reach £1.6 million
1 vat return per year. (DD is 2 calendar months after period end)
Payment instalments based on prev year’s return. Balancing pmt or ref.
Flat rate scheme
Taxable turnover < £150K
Can be used until reaches £230K
Fixed % of GROSS turnover
and Including Zero-rated and EXEMPT sales.
% depends on type of biz.
No reclaim of input vat unless Capex over £2K
If biz is a limited cost % is 16.5 regardless of type.
Define limited cost:
*Goods cost less than 2% of turnover.
*Goods cost more than 2% but are less than £1K p/a.
Due date same as normal
A VAT invoice must be issued when….
Within 30 days of the earlier of time of supply and payment.
To fix the date of physical supply, take the date ALL the work is completed.
.
For goods, the time when goods are considered to be supplied for VAT purpose is the date when one of 3 things happens
The supplier sends the goods.
The customer collects the goods.
The goods are made available for the customer to use. Eg on assembly.
Remember these rules
- Where a VAT invoice is issued Tax Point is usually Date of Issue, provided this is either before, or within 14 days of, the Date of Supply.
- VAT invoices must be issued within 30 days of whichever is earlier: Date of Supply or Date of Payment.
Complications in assessment:
- Proforma invoices. These can be ignored for the purpose of determining tax points and latest dates for issue.
- Full payment in advance of supply.
- Part payment in advance, in which case 2 Tax Points.
- Invoicing later than 14 days after supply, in which case Tax Point is whichever earlier: Date of Supply or Date of advance payment.
