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TC > VAT > Flashcards

VAT Flashcards

1
Q

Define exempt supplies

A

non-taxable supply on which output VAT cannot be charged

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2
Q

Can a person making only exempt supplies register for VAT?

A

No - therefore cannot recover on input

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3
Q

Taxable supply definition

A

Any supply of goods or services made in the UK other than an exempt supply or supply outside the scope of VAT

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4
Q

Zero - rated supplies

A

output VAT 0%

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5
Q

can a supplier who makes only zero rated supplies be VAT registered?

A

Yes and can claim input repayment

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6
Q

Output VAT

A

VAT Charged on goods/services

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7
Q

Input VAT

A

VAT suffered on purchases

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8
Q

Supply of goods?
Supply of power/heat/refrigeration / cooling / ventilation / water

A

Yes

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9
Q

Supply of goods? Grant assignment or surrender of major interest (freehold / lease for over 21 years in land)

A

Yes

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10
Q

Supply of goods
Gift of business assets

A

Yes
except < £50 gifted for business
samples

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11
Q

supply of services
temporary use of businesses assets for non-business use

A

Yes

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12
Q

Supply of services
services supplied to trader on which input tax claimed used for private/non-business yes

A

Yes

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13
Q

VAT
Ancillary element

A

supply is incidental to the main element, or better means of enjoying that main element 0 single supply

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14
Q

VAT
single economic supply

A

If various elements are so closely linked they form a single indivisible economic supply, artificial to split p regarded as single supply with one VAT rate

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15
Q

Two or more companies can be treated as a VAT group if each is established/has fixed establishment in UK and

A
  • one controls the other
  • one person (indivdiual/holding company) controls all or
  • partnership control all
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16
Q

VAT Group
Control

A

Shareholding > 50%

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17
Q

representative member of a VAT group is responsible for

A

accounting for VAT on behalf to he group, submitting VAT returns, paying excess VAT to HMRC

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18
Q

Advantages of being in a VAT group

A

no VAT on intragroup supplies
only one VAT return (admin cost savings possible)
If small, wholly exempt entity included, may be possible to recover input under de minimis partial exemption rules for the group as a hwole

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19
Q

Disadvantages of being in a VAT group

A

All entities jointly and severally liable for VAT, if one becomes insolvent, the rest become liable for its VAT
having to make one return can cause difficulties collating info required
being in an exempt or partially exempt entity may lead to restriction of input taxes

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20
Q

If total VAT for exempt supplies is less than de minimis limits, all input VAT can be recovered in full - for what are they?

A

£625 per month on average
proportion of VAT on exempt supplies < 50% all input for period

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21
Q

Simplified VAT tst

A

Monthly average input < 625
Monthly average total input less input tax directly attributable < 625

22
Q

VAT three conditions for annual test
business must

A
  • pass de minimis test for previous partial exemption year
  • consistently apply annual test throughout any given partial exemption year
  • have reasonable grounds for not expecting to incur more than £1m input tax in current partial exemption year
23
Q

Zero rated/exempt/standard rated
Construction of new residential building

A

zero rated

24
Q

Zero rated/exempt/standard rated
Sale/lease>21years of new res building

A

Zero rated

25
Q

Zero rated/exempt/standard rated
Sale of new residential accommodation created by conversion of non-residential building if sold by person doing the conversion

A

zero rated

26
Q

Zero rated/exempt/standard rated
sale of existing residential building

A

Exempt

27
Q

Zero rated/exempt/standard rated
Most leases on residential buildints

A

Exempt

28
Q

Zero rated/exempt/standard rated
Work on existing residential building

A

Standard rate

29
Q

Zero rated/exempt/standard rated
renovation of dwellings empty for at least 2 years

A

reduced rate 5%

30
Q

Zero rated/exempt/standard rated
Conversion of res building to number of dwellings

A

reduced rate 5%

31
Q

Zero rated/exempt/standard rated
conversion of non-res to dwellling/number of dwellings

A

reduced rate 5%

32
Q

Zero rated/exempt/standard rated
Construction of commercial buildings

A

standard rated

33
Q

Zero rated/exempt/standard rated
sale of new (<3y) commercial building

A

standard rated

34
Q

Zero rated/exempt/standard rated
work on existing commercial building

A

standard rated

35
Q

Zero rated/exempt/standard rated
Sale of old (>3y) commercial building

A

exempt, subject to option to tax

36
Q

Zero rated/exempt/standard rated
Lease of any commercial building

A

exempt, subject to option to tax

37
Q

When is option to tax revoked

A

automatically once person who opted to tax has held no interest for 6 years
revoked after 20 years if consented by HMRC

38
Q

consequences of option to tax

A

SR VAT charged on sale/lease (premium and rent) of property
Any inputs related to supply can be recovered (heating, cleaning repairs)

39
Q

Capital goods scheme 0 which itmes

A

Buildings and land with value 250k vat exclusive
aircraft, ships, boats bought 31/12/10 after costing 50k VAT exclusive
Single computer items (not software) costing £50k or more

40
Q

Capital goods schemes
adjustment for use

A

total input vat/10 or 5 intervals * (taxable % now - original %)

41
Q

Capital goods scheme adjustment for sale
2 adjustments made

A
  • year of sale - normal as if used whole year
  • further adjustment for complete internals following year of sale (100% taxable sale taxable 0% if sale exempt)
42
Q

Flat rate scheme for VAT

A

allows businesses to calculate net VAT by applying a flat rate percentage to their VAT inclusive turnover

43
Q

Business may join flat rate scheme if

A

value of annual taxable supplies excluding vat < £150,000

44
Q

advantages of flat rate scheme

A

reduce burden of admin preparing VAT return, no records to be kept
frequently less VAT payable than under normal rules

45
Q

when must business leave flat rate scheme

A

if annual income including vat > 230,000

46
Q

when is a business a limited cost business

A

amount spent on relevant goods inc VAT EITHER:
<2% of VAT inclusive turnover//
>2% of VAT inclusive turnover but <£1,000 pa (quarterly £250)

47
Q

What are relevant goods

A

goods used exclusively in the business include stock, stationary and office supplies and gas and electricity.
NOT capital expenditure or supply of services like accountancy rent

48
Q

when are imports chargeable to VAT

A

if same goods would be chargeable if supplied by registered trader in UK

49
Q

Business to business services, location of

A

customer that is key

50
Q

business to customer supplies, location of the

A

supplier

51
Q

most services are supplied where

A

customer has established business
otherwise where supplier established business

TC (18 decks)

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