VAT

Question 1

who is vat suffered by?

Answer 1

the final consumer who cannot reclaim it

Question 2

vat is charged on what, by what?

Answer 2

Taxable supply by a taxable person

Question 3

examples of exempt items?

Answer 3

supply of land, insurance, postal service

Question 4

when is deregistration compulosry?

Answer 4

when you are ceasing to make taxable supplies- notify within 30 days

Question 5

when could de-reg be voluntary

Answer 5

estimate of taxable turnover in the next 12 months is under 83,000

Question 6

what must business charge themselves on deregistration? unless….

Answer 6

output tax on capital items and stock held at deregistration (unless output VAT is less than 1,000)

Question 7

what is the standard VAT rate?

Answer 7

20%

reduced rate is 5%

Question 8

when is the tax point?

Answer 8

basic= earlier of
goods made available/services complete
payment received
invoice issued

separate if deposit

if basic tax point is earliest date, then if invoice issues within 14 days, use invoice date as actual tax point

Question 9

what is fuel scale charge?

Answer 9

fuel used by employee/owner for private miles - all input vat can be reclaimed
charge output vat according to fuel scale charges

Question 10

fuel scale charges?

Answer 10

given inexam- x 1/6

Question 11

when can you claim relief on bd?

Answer 11

more than 6 months overdue and has been witten off in the books

Question 12

what does bd releif allow?

Answer 12

to reclaim the output vat paid on the debt as input vat

Question 13

mixed use purchases?

Answer 13

can only reclaim business %

Question 14

cannot reclaim input vat on…

Answer 14

motor cars, unless used exclusively for business purposes
business entertaining (unless staff or foreign clients)
Non business items
items for which no vat receipt is held

Question 15

what can be recovered on the first VAT return?

Answer 15

goods supplied within 4 years of reg- still in use or stock

services supplied within 6 months of registration

Question 16

when must you notify hmrc that you have exceeded the threshold?

Answer 16

30 days after end of month in which the threshold was exceeded

Question 17

what do we do with a gift of a business asset?

Answer 17

vat is charged on the amount that you would have to pay to replace it on the day. this is cost- not the price they may or may not sell it for

Question 18

a gift of a service…

Answer 18

is not a taxable supply

Question 19

what do we do with vehicle excise duty?

Answer 19

it does not get included in the cost of the asset

Question 20

could you reclaim pre reg vat on services?

Answer 20

yes if it wasn’t more than 6 months ago

Question 21

basic tax point could also be described as…

Answer 21

adoption date

Question 22

under the historica test, when does registration take place

Answer 22

first of the month, the month after which it has happened- i.e. month later than the future basis

Question 23

should we include sale of capital assets when deciding if the threshold to register for at has been breached?

Answer 23

NO

Question 24

when must a bad debt claim be made by?

Answer 24

4 years from becoming eligible for relief.

Question 25

if a payment is received before the basic tax point

Answer 25

… payment date is the actual tax point

Question 26

can a business making purely zero rated supplies apply for exemption from registration?

Answer 26

yes

Question 27

does exempt turnover get excluded when working out if a company exceeds thresholds?

Answer 27

yes

Question 28

when is VAT paid/ reutn submitted by?

Answer 28

7th of month following end of return period

Question 29

when is a trader considered substantial for vat purposes?

Answer 29

over 2.3 million

Question 30

what happens if substantial trader?

Answer 30

pay 1/24 of last years liability in the 2nd and 3rd months of the quarter and then a balancing payment in the month following the end of the quarter.

Question 31

what is the maximum consideration for a simplified vat invoice?

Answer 31

250

Question 32

annual accounting scheme?

Answer 32

submit one return
pay in 9 monthly instalemnts with mal payment at the end of second month after the ye
OR
three payments at month 4, 7 and 10 and then a balancing payment

Question 33

limit on turnover to join accounting scheme?

Answer 33

1350,000

Question 34

who is the cash accounting vat scheme useful for?

Answer 34

those offering extended credit to customers

Question 35

when must businesses leave the cash accounting scheme?

Answer 35

when income exceeds 1.6 m

Question 36

limited cost trader % in flat rate scheme?

Answer 36

16.5- of vat inclusive turnover

Question 37

how to work out vat due in flat scheme?

Answer 37

industry sector % x vat incl turnover. must be vat inclusive so need to x by 1.2 first

Question 38

when does deregistration take effect from?

Answer 38

the day that the taxable supplies cease

Question 39

input tax can only be recovered on……

Answer 39

taxable supplies made to a business

Question 40

what is the first year relief of flat rate scheme? and what do they not reclaim?

Answer 40

1%

Question 41

businesses with turnover of less than 150k?

Answer 41

small businesses- essentially allowed 1 more chance to defaut on vat before being charged