VAT Areas of improvement

Question 1

How to work out the amount which can be claimed back when a partial exemption business?

Answer 1

Number of taxable supplies x 100 divided by total supplies
gives you a percentage of what can be claimed back

Question 1

What is partial exemption?

Answer 1

Businesses which sell Standard rated and Exempt goods

Question 2

Recovery of input tax when it comes to business entertainment? What is the one exception?

Answer 2

Business cannot recover any input tax that relates to business entertainment expenses
One exception is entertaining overseas customers

Question 3

Can you recover the input tax on employee entertainment?

Answer 3

Yes, eg staff parties and staff outings

Question 4

When can a business reclaim VAT back on vehicles

Answer 4

Car used exclusively for business purposes
Business is a taxi/driving instructor
Business is a car dealer and the car is part of its inventory
Commercial vehicles such as vans lorries or tractors

Question 5

When can a business reclaim back any VAT on repairs?

Answer 5

If business pays for the work
The Vehicle has some business use

Question 6

Can you reclaim VAT back on leasing a car?

Answer 6

Only 50% of VAT can be reclaimed on the leasing payment

Question 7

Rules on charging output vat when selling cars or vans?

Answer 7

If a business was not able to reclaim the input VAT on the original purchase price of a car that is new it will not have to charge any output VAT when it is sold.

Question 8

Name 4 different ways in which a business can deal with VAT charged on fuel?

Answer 8

Business can reclaim all input VAT charged if the vehicle is used for business purposes only
Reclaim all VAT but pay a fuel scale charge
Reclaim only the fuel which has been used for business purposes (must have receipts of fuel)
RECLAIM NONE OF IT BACK

Question 9

What boxes must the fuel scale charge be included in the VAT return?

Answer 9

VAT - Box 1
VAT exclusive amount - Box 6

Question 10

What is a mixed use asset?

Answer 10

Where an asset is used some of the time by the business and some of the time by the owner, employee for non business use

Question 11

What VAT is charged on import?

Answer 11

Same rate as in the UK 20%

Question 12

What boxes includes figures regarding imports?

Answer 12

Box 1 and box 4 - include VAT on imports
Box 7 - total value of imports excluding VAT

Question 13

What VAT is charged on exports?

Answer 13

zero rated 0%

Question 14

If a supply is being made to a business customer, where is the place of supply

Answer 14

Place where the customer belongs

Question 15

If a supply is being made to a non-business customer,
where is the place of supply

Answer 15

Place where the supplier belongs

Question 16

Name all Statutory Deductions due to be paid to HMRC?

Answer 16

Income tax (PAYE)
Employee NIC
Employer NIC
Student Loan

Question 17

How are modified invoices different from simplified

Answer 17

Show total price inclusive and exclusive of VAT

Question 18

If a business makes under 150k per year and hasn’t defaulted before what are the first 2 punishments for the 1st default and the second?

Answer 18

1st - SLN 12 month period
2nd - no surcharge IF UNDER 150,000 annual turnover

Question 19

What 2 documents are needed to input info onto payroll system?

Answer 19

Contract of employment with company,
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