VAT

Question 1

When is the tax point of a transaction?

Answer 1

The earlier of the:

• Despatch
• Invoice
• Payment

If the invoice is issued within 14 days of despatch, then the invoice is the tax point.

Question 2

What can you NOT claim input VAT on?

Answer 2

• UK client entertaining
• cars
• non-business items
• items for which no VAT receipt is held

Question 3

Under what conditions is a trader required to register for VAT via the historic method?

Answer 3

If taxable supplies in the last 12 months exceeded £82,000

Question 4

When dates should you register for VAT via the historic method and when will it be applicable?

Answer 4

• within 30 days of taxable supplies exceeding £82,000
• the first day of the second month following, e.g. if in September supplies exceed the threshold, VAT will apply from 1 November

Question 5

Under what conditions is a trader required to register for VAT via the future method?

Answer 5

If taxable supplies in the next 30 days will exceed £82,000

Question 6

When dates should you register for VAT via the future method and when will it be applicable?

Answer 6

• notify by the end of the 30 day period

- immediately applicable

Question 7

When is it compulsory to deregister for VAT?

Answer 7

when a company ceases to trade

Question 8

Can you voluntarily deregister for VAT?

Answer 8

why of course, if taxable supplies over the next 12 months will be less than £80,000

Question 9

When gifting goods, what value do you charge the VAT on?

Answer 9

The amount it would cost to replace the goods

Question 10

In a partnership, is it the partnership as a whole or the individuals?

Answer 10

VAT is charged on taxable INDIVIDUALS

Question 11

How do you calculate VAT return?

Answer 11

Output VAT - Input VAT

Question 12

If somebody runs 2 businesses and is also a member of a partnership, how many VAT registrations will they need?

Answer 12

2 for the businesses, the partnership registers collectively even though the individuals are taxed

Question 13

Is providing a service taxable?

Answer 13

No

Question 14

Do you need to pay output VAT on stock held at deregistration?

Answer 14

Yes, if the output VAT exceeds £1000

Question 15

At what point can a company claim back output VAT relating to a client that has gone into liquidation?

Answer 15

when the debt is 6 months old and written off in the accounts?

Question 16

When is the basic tax point on goods on sale or return?

Answer 16

Adoption date, unless invoice is issued under 14 days from adoption, in which case it is the invoice

Question 17

Is the supply of capital assets, e.g. machinery, taxable?

Answer 17

naaaaaa

Question 18

Does a company making over £82,000 worth of zero-rated supplies have to become VAT registered?

Answer 18

Yes they still need to register and can apply for an exemption

Question 19

Can input VAT be recovered on goods purchased before registration?

Answer 19

Yes, input VAT can be recovered on goods supplied within 4 years before registration, so long as the business still owns the goods and they are for business use.

Question 20

Can input VAT be recovered on services provided before registration?

Answer 20

Yes, input VAT can be recovered on services supplied 6 months prior to registration as long as they were for business

Question 21

If an individual’s year end is 30 June, and their return is required in 2 months of their year end, is the return due on 30 or 31 August?

Answer 21

31 August