VAT

Question 1

Recoverable VAT

Input Tax

Answer 1

• taxable person making taxable supplies
• can only reclaim business percentage of input VAT

Question 2

Irrecoverabe VAT

Input Tax

Answer 2

• Motor cars with private use
• Business entertaining
• Non business items
• Items where no invoice receipt is held

Question 3

Pre-registration VAT

Input Tax

Answer 3

• Goods supplied within 4 years of registration (still in use or stock)
• Services supplied within 6 months of registration

Question 4

Fuel Scale Charge

Input Tax

Answer 4

• fuel used by employee/owner for private miles - reclaim all input VAT
• Charge output tax - quartely scale charge x 1/6

Question 5

Bad Debt

Output Tax

Answer 5

• output tax has been paid and accounted for
• Debt > 6 months overdue from payment date
• Debt written off in books
• Bad debt relif can be claimed within 4 years

Question 6

Value of Supply

Output Tax

Answer 6

• Amount charged by the supplier, excl. VAT
• Gift of business asset - VAT excl. replacement cost

Question 7

Penalty Point threshold

Answer 7

• If penalty threshold has not been reached, points expire after 2 years from the start of the month after in which the late filing occured
• If penalty threshold has been reached, points reset when business has submitted all VAT returns on time for period of compliance and all VAT returns for previous 24 months have been submitted