Special Accounting Schemes For VAT

Question 1

What is the annual accounting scheme for VAT ?

Answer 1

This is a scheme that allows businesses to make one annual VAT return

Question 2

A business can join the annual accounting scheme for VAT if its maximum estimated taxable turnover for the next 12 months is no more than _________

Answer 2

£1.35 million

Question 3

What is option number one for the annual accounting scheme ?

(HINT - 90%)

Answer 3

A business must pay 90% of its estimated annual VAT payment based on its previous years VAT return by 9 equal monthly payments starting in the 4th month of the VAT year

Question 4

What is option number two for the annual accounting scheme ?

(HINT 25%)

Answer 4

The business must pay 3 payments each equal to 25% of the previous years VAT liability. These are paid on months 4, 7 and 10 of the annual accounting period

Question 5

What is the flat rate accounting scheme for VAT ?

Answer 5

This is a scheme that allows a business to apply a flat rate to all of its VAT payable instead of working out each one individually

Question 6

What is one of the biggest disadvantages of the flat rate accounting scheme for VAT ?

Answer 6

The business can not claim back any input VAT it incurs

Question 7

What is the taxable turnover limit for somebody wanting to join the flat rate scheme ?

Answer 7

£150,000

Question 8

Can a business running the flat rate accounting scheme claim VAT back on large capital assets ?

Answer 8

Yes

Question 9

What is the cash accounting scheme for VAT ?

Answer 9

This allows businesses to pay the VAT owed when they themselves get the payment from the customers

Question 10

What does taxable turnover include ?

Answer 10

Supplies at standard, reduced or zero rated VAT but not the VAT itself

Question 11

If a business is a part of the annual accounting scheme and their taxable turnover goes over £1.35 million they can stay on the scheme for the next annual accounting year untill turnover reaches ________________ ?

Answer 11

£1.6 million

Question 12

When would the annual accounting scheme VAT return need to be submitted ?

Answer 12

2 months after the VAT accounting year

Question 13

How must annual accounting scheme payments be made ?

(Cash, electronic, cheque)

Answer 13

Electronically

Question 14

What are some advantages of the annual accounting scheme ?

Answer 14

The business only needs to submit one VAT return per year

The business is allowed two months instead of one to submit its VAT return