VAT Flashcards
4 examples of exempt vat products
first and second class stamps
burial services
health services
not for profit services
4 examples of zero rated VAT
non luxury food
books
childrens clothes and shoes
what is the VAT fraction
20/120 or 1/6
what is the historical test for VAT
at the end of any month, taxable supplies in the last 12 months add up to over 85000
what is the future test
taxable supplies in the next 30 days are expected to exceed 85000
how many days does a trader have to inform HMRC of qualifying for VAT
30 days
when are you registered from if you pass the historical test
end of the month following the end of the 12 month period
when are you registered from if you pass the future test
start of the 30 day period
2 ways you can deregister for VAT
if you cease to trade taxable supplies
if in the next year your taxable supplies will be lower than 83000
3 advs of voluntarily registering for VAT
claim input VAT
gives credibility to business
encourages good book keeping
3 diasvds of voluntarily registering for VAT
admin costs
deters business if customers are VAT registered
what is input tax not recoverable on
cars
customer entertainment
non business purchases
how can you form a VAT group
holding company must have control over subs and all must be resident in UK
what input tax is recoverable pre registration
fixed assets bought in the 4 years prior
services supplied in 6 months prior
inventory still held on date of registration
when can you do annual vat returns
taxable supplies is 1,350,000 or less
how do you file vat returns
electronically
when is vat payments due
one month and 7 days after vat period
can you recover vat for cars used not wholly for business purposes
no
can you claim vat for mileage
yes but only business journeys
how to use fuel scale charge
(1/6) x fuel scale charge provided
when are you able to provide a less detailed VAT invoice
if total is less than 250
what is a default surcharge
a percentage of penalty that will be kept on the business for the next 12 months. this will be the penalty on any more late payments
1st default
2% of tax paid but no surcharge if its less than £400
2nd default
5% of tax paid but no surcharge if its less than £400
3rd default
10% of tax paid but not less than £30
4th and subsequent defaults
15% of tax paid but not less than £30
what is the maximum error penalty on a VAT return
higher of:
10000
or
1% of turnover of return period but max 50000
