VAT Processes Chapter 4 - VAT return Flashcards
Name 5 Debit entries into the VAT account?
VAT Purchases
VAT on cash purchases
Correction of errors from previous VAT returns (not exceeding £10,000)
Postponed VAT on imports
Bad debt relief
Name 4 Credit entries into the VAT account?
VAT on sales
VAT on cash sales
Correction of errors from previous VAT return (not exceeding £10,000)
Postponed VAT on imports
What does box 1 contain in the VAT return?
Sales:
Total of output VAT on sales (credit and cash) minus any VAT credit notes (Sales returns)
Plus VAT on imports - postponed accounting,
Plus any VAT on fuel scale charges.
What does Box 2 contain?
Nil
What does Box 3 contain?
The total of box 1 and 2
Effectively the total of box 1
What does box 4 contain?
Purchases:
Total of the input VAT on purchases
Less the VAT on any credit notes (Purchases returns),
Plus VAT on imports
Plus bad debt relief (VAT on irrecoverable debt)
What does Box 5 contain?
Box 4 - Box 3
What does Box 6 contain?
Total of all sales (excluding VAT), less any credit notes
Should contain total of Standard + Zero + Exempt supplies + VAT EXCLUSIVE fuel scale charge
+ supplies to EU and none EU states
What does Box 7 contain?
Total of all purchases (excluding VAT), less any credit notes
Should contain Total of Standard + Zero + Exempt supplies
Vat exclusive total of import
How long do VAT registered traders have to submit and pay the VAT returns using the MTD software?
1 month and 7 days,
EG: If the quarter ended on 31 May then the VAT return would have to be submitted on 7th July
How long do VAT registered traders have to submit and pay the VAT returns using a Direct Debit?
1 month and 10 days
Name all the records for output tax?
Sales daybook
Sales return daybook
Cash book - receipts side
Name all the records for input tax?
Purchases daybook
Purchase Returns daybook
Cash book - payments side
Petty cash book
Is bad debt output or input tax?
input
Which box tells us whether we reclaim or pay vat to hmrc
box 5
If £50 VAT is paid in march and the rest of the VAT (£250) is paid in april which quarter/quarters are these figures included in the VAT return
£50 is included in 1st Quaterly VAT return and the rest in the 2nd quaterly VAT return
Is £2,000 Postponed accounting input or output vat?
Both
When reconciling the Vat return with the Vat trial balance how do you work out the input and output vat for the reconciliation?
Output tax on closing trade receivables - figure of closing trade receivables/6
Input tax on closing trade payables - figure of closing trade payables/6
What is MTD?
Making tax digital is a HMRC requirement for VAT Registered businesses to keep digital records and submit VAT refunds using compatible software
When should you not sign up for MTD?
7 days before the return is due or 5 days after otherwise the business paying by direct debit might end up paying twice
If the vat return is not returned by the due date what will happen?
1st offence = surcharge liability notice (12 month period)
If the business defaults again within 12 months then the business will pay a surcharge
Is payment to HMRC input tax or output tax
Neither
