VAT

Question 1

What is VAT charged on?

Answer 1

Taxable supply made by taxable person in course of business

Question 2

What is output tax?

Answer 2

The VAT the business charges to the customer on goods or services

Question 3

What is input tax?

Answer 3

The VAT paid by the business

Question 4

What is a taxable supply for the purposes of VAT?

Answer 4

The supply of goods & services

Question 5

What are 4 VAT-exempt supplies?

Answer 5

1. Residential land
2. Postal services
3. Education
4. Health services

Question 6

Can makers of zero-rated supplies reclaim input tax?

Answer 6

Yes

(Zero rated supplies eg. water, books)

Question 7

Can makers of VAT-exempt supplies reclaim input tax?

Answer 7

No

Question 8

What are the registration requirements for VAT?

Answer 8

Must register under VAT Act 1994 if value of taxable supplies in preceding 12 months exceeded £85,000

Optional to register otherwise (but can only reclaim input tax if registered)

Question 9

What are the invoice requirements for VAT?

Answer 9

A person making a taxable supply to a taxable person must provide a tax invoice including VAT number, value of supply, rate of tax charged

Must have VAT invoices in respect of all input tax reclaimed