VAT

Question 1

4 examples of exempt vat products

Answer 1

first and second class stamps
burial services
health services
not for profit services

Question 2

4 examples of zero rated VAT

Answer 2

non luxury food
books
childrens clothes and shoes

Question 3

what is the VAT fraction

Answer 3

20/120 or 1/6

Question 4

what is the historical test for VAT

Answer 4

at the end of any month, taxable supplies in the last 12 months add up to over 85000

Question 5

what is the future test

Answer 5

taxable supplies in the next 30 days are expected to exceed 85000

Question 6

how many days does a trader have to inform HMRC of qualifying for VAT

Answer 6

30 days

Question 7

when are you registered from if you pass the historical test

Answer 7

end of the month following the end of the 12 month period

Question 8

when are you registered from if you pass the future test

Answer 8

start of the 30 day period

Question 9

2 ways you can deregister for VAT

Answer 9

if you cease to trade taxable supplies

if in the next year your taxable supplies will be lower than 83000

Question 10

3 advs of voluntarily registering for VAT

Answer 10

claim input VAT
gives credibility to business
encourages good book keeping

Question 11

3 diasvds of voluntarily registering for VAT

Answer 11

admin costs

deters business if customers are VAT registered

Question 12

what is input tax not recoverable on

Answer 12

cars
customer entertainment
non business purchases

Question 13

how can you form a VAT group

Answer 13

holding company must have control over subs and all must be resident in UK

Question 14

what input tax is recoverable pre registration

Answer 14

fixed assets bought in the 4 years prior
services supplied in 6 months prior
inventory still held on date of registration

Question 15

when can you do annual vat returns

Answer 15

taxable supplies is 1,350,000 or less

Question 16

how do you file vat returns

Answer 16

electronically

Question 17

when is vat payments due

Answer 17

one month and 7 days after vat period

Question 18

can you recover vat for cars used not wholly for business purposes

Answer 18

no

Question 19

can you claim vat for mileage

Answer 19

yes but only business journeys

Question 20

how to use fuel scale charge

Answer 20

(1/6) x fuel scale charge provided

Question 21

when are you able to provide a less detailed VAT invoice

Answer 21

if total is less than 250

Question 22

what is a default surcharge

Answer 22

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

Question 23

1st default

Answer 23

2% of tax paid but no surcharge if its less than £400

Question 24

2nd default

Answer 24

5% of tax paid but no surcharge if its less than £400

Question 25

3rd default

Answer 25

10% of tax paid but not less than £30

Question 26

4th and subsequent defaults

Answer 26

15% of tax paid but not less than £30

Question 27

what is the maximum error penalty on a VAT return

Answer 27

higher of:

10000

or

1% of turnover of return period but max 50000