VAT Flashcards
who is vat suffered by?
the final consumer who cannot reclaim it
vat is charged on what, by what?
Taxable supply by a taxable person
examples of exempt items?
supply of land, insurance, postal service
when is deregistration compulosry?
when you are ceasing to make taxable supplies- notify within 30 days
when could de-reg be voluntary
estimate of taxable turnover in the next 12 months is under 83,000
what must business charge themselves on deregistration? unless….
output tax on capital items and stock held at deregistration (unless output VAT is less than 1,000)
what is the standard VAT rate?
20%
reduced rate is 5%
when is the tax point?
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
what is fuel scale charge?
fuel used by employee/owner for private miles - all input vat can be reclaimed
charge output vat according to fuel scale charges
fuel scale charges?
given inexam- x 1/6
when can you claim relief on bd?
more than 6 months overdue and has been witten off in the books
what does bd releif allow?
to reclaim the output vat paid on the debt as input vat
mixed use purchases?
can only reclaim business %
cannot reclaim input vat on…
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
what can be recovered on the first VAT return?
goods supplied within 4 years of reg- still in use or stock
services supplied within 6 months of registration
when must you notify hmrc that you have exceeded the threshold?
30 days after end of month in which the threshold was exceeded
what do we do with a gift of a business asset?
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
a gift of a service…
is not a taxable supply
what do we do with vehicle excise duty?
it does not get included in the cost of the asset
could you reclaim pre reg vat on services?
yes if it wasn’t more than 6 months ago
basic tax point could also be described as…
adoption date
under the historica test, when does registration take place
first of the month, the month after which it has happened- i.e. month later than the future basis
should we include sale of capital assets when deciding if the threshold to register for at has been breached?
NO
when must a bad debt claim be made by?
4 years from becoming eligible for relief.
if a payment is received before the basic tax point
… payment date is the actual tax point
can a business making purely zero rated supplies apply for exemption from registration?
yes
does exempt turnover get excluded when working out if a company exceeds thresholds?
yes
when is VAT paid/ reutn submitted by?
7th of month following end of return period
when is a trader considered substantial for vat purposes?
over 2.3 million
what happens if substantial trader?
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.
what is the maximum consideration for a simplified vat invoice?
250
annual accounting scheme?
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
limit on turnover to join accounting scheme?
1350,000
who is the cash accounting vat scheme useful for?
those offering extended credit to customers
when must businesses leave the cash accounting scheme?
when income exceeds 1.6 m
limited cost trader % in flat rate scheme?
16.5- of vat inclusive turnover
how to work out vat due in flat scheme?
industry sector % x vat incl turnover. must be vat inclusive so need to x by 1.2 first
when does deregistration take effect from?
the day that the taxable supplies cease
input tax can only be recovered on……
taxable supplies made to a business
what is the first year relief of flat rate scheme? and what do they not reclaim?
1%
businesses with turnover of less than 150k?
small businesses- essentially allowed 1 more chance to defaut on vat before being charged
