VAT

Question 1

VAT is charged on any supply of _____ or ________ made in the __ if the supply is made by a taxable person whilst ________ __ ________

Answer 1

goods, services, UK, carrying on business

Question 2

What is the standard VAT rate which applies to most transactions?

Answer 2

20%

Question 3

What is the current VAT threshold?

Answer 3

£85,000 turnover

Question 4

Under the historic test, a business must register for VAT if its turnover exceeds the VAT threshold within […]

Answer 4

any 12 month period

Question 5

Under the future test, a business must register for VAT if its turnover is expected to exceed the threshold following […]

Answer 5

30 days alone

Question 6

Under the historic test, the business must register for VAT within __ _____ and must charge VAT from the start of the _______ ______

Answer 6

30 days, following month

Question 7

Under the future test, HMRC must be notified before the 30 day period ends and VAT must be charged from the date that the business was _______ that its taxable suppliers were going to ______ the threshold within the 30 day period

Answer 7

aware, exceed

Question 8

Can a business voluntarily register for VAT? If so, why would they do this?

Answer 8

Yes - to recover VAT it paid on its own purchases

Question 9

When may a business deregister for VAT?

Answer 9

If its taxable turnover falls below £83,000

Question 10

When must a business deregister for VAT?

Answer 10

Within 30 days of the time it ceases trading

Question 11

What are 4 features of a tax invoice?

Answer 11

1. Supplier’s VAT number
2. Tax point
3. Value of the supply
4. Rate of tax charged

Question 12

What is meant by tax point?

Answer 12

The time of the supply of goods or services which determines the accounting period within which it falls

Question 13

What is the basic tax point for goods?

Answer 13

The time the goods are removed or delivery of goods

Question 14

What is the basic tax point for services?

Answer 14

When the services are performed

Question 15

What happens to the tax point if the supplier issues a VAT invoice or receives payment before the date the goods are delivered or made available?

Answer 15

The tax point is brought forward to that earlier date

Question 16

If a VAT invoice is issued within 14 days after the basic tax point, what happens to the tax point?

Answer 16

The invoice date becomes the new tax point

Question 17

How often must a business file an electronic VAT return?

Answer 17

Each quarter

Question 18

The amount payable to HMRC is the VAT the business charged its _______ on all supplies of goods and services (aka ______ tax) less any VAT the business ____ on goods and services related to the ones it supplied (aka ______ tax)

Answer 18

customers, output tax, paid, input

Question 19

What fraction should you multiply an amount by if it’s inclusive of VAT and you want to find out the amount of VAT that was collected?

Answer 19

1/6