VAT Flashcards
Is a gift of SERVICES taxable supply?
NO
Is a gift of GOODS a taxable supply?
yes
Is private use of goods/services of a business by the owner a taxable supply?
yes
how do you work out if someone that makes taxable supplies should be registered for VAT?
You can look historically or to the future….
historically, if over the previous 12months, taxable supplies have been >£83k FOR THE WHOLE 12m then you have 30 days to notify hmrc and you need to start vat the next month after notification
to the future, if at any time over the next 30 days your taxable supplies will be >£83k then you have 30 days to notify hmrc and vat charging starts on the day of test
how does vol registration work>
you can do so but must be making taxable supplies - advantage is you can reclaim the input tax
how can you be exempt from vat registration?
if you are normally due repayment - i.e. making zero-rated supplies
hwo does vat deregistration work?
compulsary if cease to make taxable supplies, you must notify the business within 30d
voluntary if taxable turnover estimate in the next 12m is
VAT tax point is basically the earliest date that anything happened although for a service it has to be complete. but what else do you have to rememebr/
if invoice issued within 14d of basic tax point then use invoice date
how do you treat deposits?
separate tax points for desposit and balance
what happens if you’ve already paid hmrc the vat you owe them (input vat) but the customer hasn’t paid you the cash yet
if debt >6m oversdue and debt written off in books then you can reclaim the input vat as along as you do so within 4 years
can you claim back vat on goods supplied prior to registration for vAT?
yes, you can do so on goods supplied within 4 years of registration (still in use or stock) and services supplied within 6 momnths of registration
can you reclaim VAT on entertaining customers?
no
is ‘outside the scope of vat’ the same as exempt?
NO
if someone is a sole trader and a partner in a business, how many vat registrations will they be involved with?
two as a partnership is a separate ‘person’ to a sole trader. if someone had two sole trader businesses then that’d just be one vat reg
someone realised their future vatable supplies will exceed £83k on 03/08/2020, when will their registration be effective from?
03/08/2020, it is the notification that can wait 30d or whatever
what can displace the idea of the invoice being within 14 days of the basic tax point then the invoice becomes the tax date?
if payment already made
can you reclaim vat on something that never arrived?
no, needs to actually be supplied
when is vat payments to hmrc due?
7 days after last day of the month following end of the return period, return periods are usually quarterly but monthly can be available
does goods dispatched count as a tax point?
yes
can you reclaim any vat on a car that is partly used for personal use?
no
when are payments on account required for vat?
when vat liability >£2.3m
how much do you pay for each payment on account for vat/
1/24 x previous year’s total VAT liability paid at the end of second and third months in each quarter, balancing payment due (with vat return) at end of month foloowing end of quarter, must be paid electronically
what is the annual accounting scheme?
the business submits 1 vat return per year. expected taxable supplies (excl. vat) in the following year =<1.35m
the business makes 9 installments which are 10% each of the estimated vat liability, these occur in months 4-12 with a balancing payment along with the vat return 2 months after year end
what is the alternative to the annual accounting scheme?
3 quarterly interim payments of 25%, payments at 4, 7 and 10 months
what is the cash accounting scheme
expected taxable supplies (excl. vat) in following year <=1.35m
you account for vat on CASH PAID and received basis, i.e. ignore tax points
automatic bad debt relief
what is the flat rate scheme?
for taxable persons where annual taxable supplies (excl. vat) are =< 150k
you have to leave if annual total turnover (incl. vat and exempt income) >230k
what details do you know about the flat rate scheme?
vat due = % (industry sector) x VAT INCLUSIVE turnover
there is a 1% reduction in the first year of VAT registration (this will be included in the % given in the question if relevan)
turnover includes taxable and exempt supplies and sales of capital assets
what details do you know about the flat rate scheme? contd….
you still charge vat to customers (issue invoices)
you DO NOT reclaim input tax
benefit to business is simpler admin for samll businesses
may reduce vat kliability
limited cots traders all use a fixed 16.5% vat rate
what is the surcharge liability thing all about?
on first late payment or return for a business they get a surcharge liability nptice which lasts for 12 months and lasts until a whole year has been done properly. business is liable for penalties if mess up in the SLN time
small businesses, turnover <150k get a letter oprrior tot he sln
what happens if a vat return (not payment) is late?
surcharge period extended but not fined
what are the details for vat errors?
you should correct errors on the next return provided the error was not deliberate and error =< greater of: £10k and 1% of net taxable turnover (VAT exclusive) up to a max of £50k
when do you have to pay interest?
you have to pay interest when hmrc raises an assessment for unpaid vat or voluntary disclosure of an error > error reporting threshold
interest runs from due date to actual payment date
how long do you have from the end of a ct accounting period to submit your return?
aa year
when do you need to submit your p11ds
6 July
how do poas for vat for companies with turnover of 2.3m work?
1/24th of last year twice in a quarter then balancing payment
