An Introduction to VAT (2) Flashcards
When is registration for VAT compulsory (historical test)
At end of any month, taxable supplies over the previous 12 months have exceeded £85000
When is registration for VAT compulsory (future test)
In the next 30 days, taxable supplies are expected to exceed £85000
When can VAT registration requirement be ignored/
If trader can satisfy HMRC that taxable supplies in following 12 month period are less than £83000
What are all taxable supplies in the VAT-exclusive value?
All zero-rated and standard rated suppleis
How long does trader have to notify HMRC for a registration?
They have 30 days to notify HMRC
When is the registration effective?
First day of second month after £85000 was exceeded
Earlier date if they and the trader agree
Start of 30 day period if future 30-day test applies
What is used when determining the value of a person’s taxable supplies for purpose of registration?
Supllies of goods and services that are capital assets of the business are to be disregarded
What capital assets are to be disregarded?
Non zero rated taxable supplies of interests in land
Even if trader does not register for VAT when they should?
Output VAT is still due from the date they should have registerd for VAT
What if business ceases to make taxable suppliers?
It msut deregister
If a transfer is of a going concern for deregistration?
It is outside the scope of VAT
Advantages of registering for VAT voluntarily
Able to reclaim input VAT
Credibility
Imposes discipline on business to keep accurate records
Disadvantages of registering for VAT voluntarily
Adds to administrative costs
Reduces competitve edge
Deters business if customers aren’t VAT registered
What must traders making standard or zero rated supplies do when registered/
Must charge VAT on all taxable supplies using tax invoices
What can traders recover when registered?
Related input tax suffered
