VAT

Question 1

Is a gift of SERVICES taxable supply?

Answer 1

NO

Question 2

Is a gift of GOODS a taxable supply?

Answer 2

yes

Question 3

Is private use of goods/services of a business by the owner a taxable supply?

Answer 3

yes

Question 4

how do you work out if someone that makes taxable supplies should be registered for VAT?

Answer 4

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

Question 5

how does vol registration work>

Answer 5

you can do so but must be making taxable supplies - advantage is you can reclaim the input tax

Question 6

how can you be exempt from vat registration?

Answer 6

if you are normally due repayment - i.e. making zero-rated supplies

Question 7

hwo does vat deregistration work?

Answer 7

compulsary if cease to make taxable supplies, you must notify the business within 30d

voluntary if taxable turnover estimate in the next 12m is

Question 8

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/

Answer 8

if invoice issued within 14d of basic tax point then use invoice date

Question 9

how do you treat deposits?

Answer 9

separate tax points for desposit and balance

Question 10

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

Answer 10

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

Question 11

can you claim back vat on goods supplied prior to registration for vAT?

Answer 11

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

Question 12

can you reclaim VAT on entertaining customers?

Answer 12

no

Question 13

is ‘outside the scope of vat’ the same as exempt?

Answer 13

NO

Question 14

if someone is a sole trader and a partner in a business, how many vat registrations will they be involved with?

Answer 14

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

Question 15

someone realised their future vatable supplies will exceed £83k on 03/08/2020, when will their registration be effective from?

Answer 15

03/08/2020, it is the notification that can wait 30d or whatever

Question 16

what can displace the idea of the invoice being within 14 days of the basic tax point then the invoice becomes the tax date?

Answer 16

if payment already made

Question 17

can you reclaim vat on something that never arrived?

Answer 17

no, needs to actually be supplied

Question 18

when is vat payments to hmrc due?

Answer 18

7 days after last day of the month following end of the return period, return periods are usually quarterly but monthly can be available

Question 19

does goods dispatched count as a tax point?

Answer 19

yes

Question 20

can you reclaim any vat on a car that is partly used for personal use?

Answer 20

no

Question 21

when are payments on account required for vat?

Answer 21

when vat liability >£2.3m

Question 22

how much do you pay for each payment on account for vat/

Answer 22

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

Question 23

what is the annual accounting scheme?

Answer 23

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

Question 24

what is the alternative to the annual accounting scheme?

Answer 24

3 quarterly interim payments of 25%, payments at 4, 7 and 10 months

Question 25

what is the cash accounting scheme

Answer 25

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

Question 26

what is the flat rate scheme?

Answer 26

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

Question 27

what details do you know about the flat rate scheme?

Answer 27

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

Question 28

what details do you know about the flat rate scheme? contd….

Answer 28

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

Question 29

what is the surcharge liability thing all about?

Answer 29

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

Question 30

what happens if a vat return (not payment) is late?

Answer 30

surcharge period extended but not fined

Question 31

what are the details for vat errors?

Answer 31

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

Question 32

when do you have to pay interest?

Answer 32

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

Question 33

how long do you have from the end of a ct accounting period to submit your return?

Answer 33

aa year

Question 34

when do you need to submit your p11ds

Answer 34

6 July

Question 35

how do poas for vat for companies with turnover of 2.3m work?

Answer 35

1/24th of last year twice in a quarter then balancing payment