Introduction to Value Added Tax Flashcards
What is VAT charged on?
- Any supply of goods or services made in the UK
- Where it is taxable supply
- Made by taxable person
- In course of any business carried on by that person
When must a person require to be registered?
1) If end of month taxable supplies in period of one year or less has exceeded VAT registration threshold
2) If reasonable grounds for believing their taxable supplies in a period of 30 days, then beginning will exceed VAT registration threshold
What is the current VAT registration threshold?
£90,000
What is the current VAT de-registration threshold?
£88,000
What is output tax?
VAT chargeable by business when making supply of goods or services
What is input tax?
VAT paid by a person on goods of service
What is the standard rate of VAT?
20%
What are the types of VAT supply?
1) Standard rated
2) Reduced rated
3) Zero rated
4) Exempt
What is standard rate of VAT?
20%
What is reduced rate of VAT?
5%
When does reduced rate of VAT apply?
Supplies such as heating and power, installation of mobility aids, smoking cessation products, children’s car seats
What are zero rated supply?
Food, sewerage and water, books / newspapers, new houses, public transport, children’s clothing
What supplies are exempt?
Insurance, finance, education / health, sale of land and buildings (unless elected)
What is VAT invoice importance?
Company must supply client with VAT invoice within 30 days of supply and keep a copy
How often is VAT return?
Every three months
When is due date of VAT?
Usually within one month and seven days after end of VAT period
