VAT

Question 1

What is VAT?

Answer 1

VAT is an indirect tax charged on the selling prices of the taxable goods

Question 2

How many VAT rates are there?

Answer 2

5

Question 3

What are the different VAT rates?

Answer 3

Standard rate
Reduced rate
Zero rate
Exempt
Outside the scoop

Question 4

What rate is 20%?

Answer 4

A standard rate

Question 5

What rate is 5%?

Answer 5

Reduced rate

Question 6

What are the three types of 0% VAT rate?

Answer 6

Zero rate, exempt, outside the scoop

Question 7

What is the taxable turnover for VAT?

Answer 7

£85k

Question 8

When is a business required to register for VAT?

Answer 8

When they turnover £85k

Question 9

When does the business charge VAT on goods?

Answer 9

When they earn a turnover of £85k

Question 10

List items of the zero - rated items?

Answer 10

Childrens clothes, basic foods and books

Question 11

List of exempt items?

Answer 11

Postage, health services and insurance

Question 12

List of ‘outside the scoop’

Answer 12

Wages and salaries

Question 13

List of reduced rates?

Answer 13

Domestic heat, light, and children’s car seats

Question 14

Where does that VAT go that’s charged by the business?

Answer 14

VAT is due to be paid to HMRC

Question 15

Can the business reclaim VAT?

Answer 15

Yes

Question 16

What does the business pay VAT ON?

Answer 16

Sales

Question 17

What do business reclaim VAT on?

Answer 17

Purchases

Question 18

What happens if a business have more VAT on sales, than purchases?

Answer 18

They will owe VAT to HMRC

Question 19

What happens if a businesses purchase VAT is higher than their sales?

Answer 19

A refund will be due back from HMRC

Question 20

What must a business do when they are registered from VAT?

Answer 20

They just show the VAT reg number of all business documents

Question 21

How is VAT calculated?

Answer 21

As a percentage of the value of goods or services sold

Question 22

What should the VAT number be displayed?

Answer 22

On all invoices and credit notes

Question 23

What is the tax code for standard rate?

Answer 23

T1

Question 24

What is the tax code for reduced rate?

Answer 24

T5

Question 25

What is the tax code for zero rate?

Answer 25

T0

Question 26

What is the tax code for exempt?

Answer 26

T2

Question 27

What is the tax code for outside the scope?

Answer 27

T9

Question 28

Where should the vat number be displayed?

Answer 28

On all invoices & credit notes

Question 29

If you are asked to check for discrepancies on an invoice, what to look for?

Answer 29

Invoice amounts, quantity, price & calculations are all correct.

Question 30

What are you required to check the details of the invoice against?

Answer 30

The purchase order and delivery note

Question 31

Checking the invoice against the purchase order and delievery note includes?

Answer 31

Quantity, description, codes and arithmetical calculations as well as identity discrepancies