VAT Flashcards
What are the rates of VAT?
0%
20%
5% reduced rate for certain products. (Domestic fuel, contraceptive products.)
Exempt (Banking, Insurance)
What previous rates were there for the tourism industry?
5% until 30/09/21
12.5% 01/10/21-31/03/22
20% currently
When was the VAT refferal scheme?
VAT in this persiod 20/03/20 - 30/06/20 could be deffered up to 31/03/22
Needed to apply by June 2021
What input VAT can’t be reclaimed?
Entertainment expenses and VAT on cars.
What is output VAT
The VAT paid to a business
What is input VAT?
The VAT offset for against business expenses.
Who has to be registered to pay and charge VAT?
All traders must be registered for VAT if the value of their taxable supplies in the previous 12 months is more than the threshold. £85,000
Voluntary traders can register where they have significant input VAT but not output.
When can a trader de-register?
If there turnover drops bellow £83,000
What are taxable supplies?
Supplies that are not exempt but may be taxed at 0% or zero rated.
What do exempt supplies include?
Finance
Health
Education
How much can a small company reclaim on input VAT that is attributable to exempt supplies that they have made?
£7500
How does the flat rate scheme work?
Allows small businesses to account for VAT as a percentage of their turnover.
That rate varies depending on the sector and what the HMRC works out a similar business of their size would pay.
What must a trader do to qualify for the flat rate VAT scheme?
Must have VAT taxable turnover of no more than £150,000 excluding VAT in the next 12 months.
When would a company cease being on the VAT falt rate scheme?
If their turnover exceeds £230,000 including VAT.
Cannot rejoin for 12 months.
How do companies dealing in second-hand goods pay VAT?
Dealers account for VAT on the difference between the price paid for an item and the price for which it is sold.
