VAT

Question 1

When is the due date for self-assessed VAT?

Answer 1

Monthly/ quarterly

Question 2

Examples of outside of scope of VAT

Answer 2

Dividends salaries

Question 3

Examples of exempt items from VAT

Answer 3

Insurance

Question 4

Examples of zero rated VAT

Answer 4

Good and kids clothing

Question 5

Examples of reduced rated VAT

Answer 5

Domestic and utilities

Question 6

What’s are the two turnover tests for compulsory VAT registration

Answer 6

Historic (did the last 12 months exceed limit)
Future prospects (will the limit be exceeded in the next 30 days)

Question 7

What’s are the requirements for VAT bad debts

Answer 7

1. The debts has to be at least 6 months overdue
2. Has to be written off in the business books

Question 8

What are the payment dates if VAT lib exceeds 2.3 mil

Answer 8

Due at the end of month 2 and 3 of each quarter (amount to 1/24th of last years annual VAT lib) the remaining amount is due one month after quarter end

Question 9

When is notification needed for VAT limit?

Answer 9

30 days after month end which VAT limit is reached

Question 10

Is vat on uk client entertaining ever recoverable?

Answer 10

No

Question 11

Can a car be a taxable benefit if it has no private use?

Answer 11

No

Question 12

When must you start charging VAT?

Answer 12

When you have reached limit and at the start of the 30 days after month end

Question 13

Any private use of car means the VAT is irreconcilable

Answer 13

True

Question 14

What’s the limit which gift to customer does not be deemed a supply?

Answer 14

£50

Question 15

What’s the limit before registration that services are VAT recoverable?

Answer 15

6 months

Question 16

How many months have to have eclipsed for bad debt relief to take effect?

Answer 16

6 months

Question 17

How long do you have to claim bad debt relief?

Answer 17

4 years after becoming eligible

Question 18

What’s the limit for a simplified VAT receipt?

Answer 18

£250

Question 19

VAT retire if filed electronically how long after month end?

Answer 19

One month and 7 days

Question 20

Example of out of scope VAT taxable supplies

Answer 20

Dividends

Question 21

Example of exempt vat taxable supplies?

Answer 21

Insurance

Question 22

Example of zero rated vat supplies

Answer 22

Food, kids clothes

Question 23

Example of reduced vat taxable supplies

Answer 23

Domestic utilities

Question 24

What are the two tests for compulsory vat registration?

Answer 24

Future prospects (will taxable supplies exceed limit in the next 30 days)
Historic ( has the limit been exceed in the last 12 months)

Question 25

When is vat charged?

Answer 25

Historic - the following month, once the limit is reached
Future prospects - start of 30 day period

Question 26

What must a taxable vat person do?

Answer 26

Charge output tax
Quote vat number
File a vat return
Maintain appropriate vat record for 6 years

Question 27

How long must vat record be kept?

Answer 27

6 years

Question 28

Advantage of registering for vat

Answer 28

Avoid late penalties
Recover input tax
Make a small business look bigger

Question 29

Disadvantage of vat

Answer 29

Compliance with vat rules
Must charge vat

Question 30

When does compulsory de registration happen?

Answer 30

If the company ceases to make taxable supplies,
HMRC must be made aware 30 days from the person becoming aware that they will no longer make taxable supplies

Question 31

When can voluntary de registration take place?

Answer 31

If the taxable supplies is forecast to be below registration limit, effective on agreed date with HMRC

Question 32

On deregistration bay must be accounted on al fixed assets and inventory that had vat taxed

Answer 32

Waived if below £1000

Question 33

Are gifts taxable supplies?

Answer 33

Only if above £50

Question 34

Are gift of service or trade samples taxable on vat?

Answer 34

No

Question 35

Business can recover all vat of fuel used by employees

Question 36

Vat is charged depending on the scale rate if the co2 car

Question 37

What’s the time limit of recovering vat before registration on goods?

Answer 37

4 years for business purposes and not sold on

Question 38

What’s the time limit of recovering vat before registration on services?

Answer 38

6 months

Question 39

Examples when vat is not recoverable for pre registration

Answer 39

Cars, unless 100% business use
Non business items,
No vat receipt held

Question 40

When is VAT reclaimed in entertaining?

Answer 40

Allowed for staff or foreign customers

Question 41

When can a bat error be corrected?

Answer 41

On the next return as long as it was small (below 10,000 or 1% turnover)

Question 42

If client pays by direct debit it is 3 working days before normal due date

Question 43

When is payment of substantial traders due? (Over 2.3 mil)

Answer 43

Month 2 and 3 of every quarter and is 1/24th of the last year’s annual limit. The remaining us paid one month after quarter.

Question 44

When are default charges applied?

Answer 44

Non for first default but for all others with 12 months is does.
If the annual turnover is below 150,000 they get a letter before the first default let off

Question 45

Annual accounting scheme?

Answer 45

Only one vat return is submitted per year.
Must be submitted two months of the end of the period.
Can be 9 payments paid on month 4 -12 (1/10 of last year vat lib)
Can be 3 payments on month 4, 7, 10 (1/4 of the last year vat lib)

Question 46

How does cash accounting scheme work?

Answer 46

Vat is based on the cash receipts rather then invoices

Question 47

How does flat rate scheme work?

Answer 47

VAT is applies on a percentage across the total turnover and is based on type of business.
You get a 1% reduction in first year