VAT - Partial exemption

Question 1

What is the scenario to look out for?

Answer 1

VAT registered business making taxable & exempt supplies

Question 2

Where can you find test 1?

Answer 2

Hardmans

Question 3

What do you do if you fail test 1?

Answer 3

Go to test 2

Question 4

Where can you find test 2?

Answer 4

Hardmans

Question 5

What do you do if you fail test 2?

Answer 5

Go to the standard test

Question 6

What is the standard test step 1?

Answer 6

Categorising the directly attributable input VAT between Taxable and Exempt

Question 7

What is the standard test step 2?

Answer 7

List down the un-attributable input VAT

Question 8

What is the formula for un-attributable input vat?

Answer 8

Taxable supplies / Total supplies

Question 9

What is done with the formula for un-attributable input tax?

Answer 9

Multiply the un-attributable amount by the % to find what is taxable and what is exempt

Question 10

What is the formula for the un-attributable input tax?

Answer 10

Round up

Question 11

What is the de minimis test used on

Answer 11

It is used on the exempt amount of supplies

Question 12

What are the two parts of the De minimis test?

Answer 12

1) Is the exempt amount < 625 per month?
2) If #1 passed - is the exempt amount <50% of taxable supplies?

Question 13

If both of the De minimis test is met, what is the outcome

Answer 13

All of the exempt tax can be recovered.