Module 13: Further Aspects of VAT Flashcards

1
Q

Calculating input tax recoverable - Step 1

A

Directly attribute input tax to taxable and exempt supplies as far as possible

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Calculating input tax recoverable - Step 2

A

Calculate VAT recovery percentage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Calculating input tax recoverable - step 3

A

Use the percentage to apportion unattributable input tax to taxable and exempt supplies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Calculating input tax recoverable - step 4

A

Check whether the irrecoverable input tax is de minimis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Calculating input tax recoverable - step 5

A

Calculate the total recoverable input tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

VAT recovery percentage

A

Taxable supplies / total supplies

Rounded up to the nearest %

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

De minimis limit

A

If the input tax attributed to exempt supplies is:
- < £625 per month on average (£1875 per quarter and £7500 per year)
AND
- < half the total input tax in the period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

If input tax attributable to exempt supplies is within de minimis limit

A

Can be recovered

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Changes to partial exemption calculations - use PY %

A

Can base calculations on PY overall recovery percentage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Changes to partial exemption calculations - timing of adjustment

A

Can make annual adjustment in final VAT return of VAT year instead of first VAT return after end of VAT year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Supply of land or buildings

A

Exempt

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Sale of new (< 3 year) commercial building

A

Exception

20% standard rated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Sale of brand new residence

A

Exception

Zero rated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Services for qualifying conversion of residential property

A

Exception

5% reduced rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Opting to tax

A

Makes an exempt supply a standard rated supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Option to tax can be on a

A

Property by property basis

17
Q

Option to tax is

A

Fundamentally irrevocable - apart from in first 6 months or after 20 years

18
Q

Group registration - supplies between group members

A

Ignored for VAT purposes

19
Q

Group registration - input tax

A

Input tax incurred by group companies is attributed to the group’s use of the input in making supplies to third parties, not the individual company’s use

20
Q

Advantage of grouping (4)

A
  • simpler the prepare one VAT return
  • supplies between group members are ignored
  • can include small wholly exempt company and recover de minimis
  • greater central control of tax affairs
21
Q

Disadvantages of grouping (5)

A
  • difficult to collect all info needed
  • can be advantages to charging VAT on intra-group supplies
  • every company in group is jointly liable
  • group may be more likely to exceed £2.3m POA threshold
  • higher default surcharges