VAT and Discounts

Question 1

What are the things a full VAT invoice must show?

Answer 1

1. name, address + VAT number of seller
2. rate of VAT for each item
3. net total
4. amount of VAT chargeable at each rate
5. total VAT charge
6. total amount payable

Question 2

What are the things a sale of less than £250 should show on a VAT invoice?

Answer 2

1. name, address and VAT number of seller
2. date of sale
3. description of goods
4. rate of VAT
5. total amount payable

Question 3

What is VAT on revenue (sales)?

Answer 3

Output VAT

Question 4

What is VAT on expenditure (purchases)?

Answer 4

Input VAT

Question 5

How to remember types of VAT?

Answer 5

SOPI
-sales = output
-purchases = input

Question 6

How to calculate VAT to pay HMRC?

Answer 6

output VAT - input VAT
-positive =VAT TO PAY
-negative = VAT TO RECLAIM

Question 7

How to calculate VAT with trade discount?

Answer 7

1. total goods amount
2. minus trade discount
3. VAT on this net total

Question 8

How to calculate VAT with trade discount + prompt payment?

Answer 8

1. total goods amount
2. minus trade discount
3. minus prompt payment
4. VAT on this total