An Introduction to VAT (3) Flashcards
Advantages of group registration? (nominate)
Allows group companies to nominate one company in group to prepare one VAT return for companies in the group
Advantages of group registration? (transaction)
Intra-group transactions are disregarded for VAT purposes
Advantages of group registration? (administration)
It is administratively much easier
Advantages of group registration? (members)
All members of group registration are jointly and severally liable for VAT liability
What must the holding entity have in group registration?
May control subsidiaries and entites within group registration must have a fixed establishment in the UK
What can the holding entity be?
A compnay, sole trader or partnership but rest of group members must be corporate
What must entites elect?
To form a VAT group, it is not automatic, and not all eligble entities need to be included
What can VAT incurred on goods and services before registration be treated?
As input tax and recivered from HMRC subject to certain conditions
Condition for if the claim is for input tax suffered on goods purchased proper to registration (purpose of business)
Goods were acquired for the purpose of business which either was carried on, or was to be carried on by them, at time of supply
Condition for if the claim is for input tax suffered on goods purchased proper to registration (not been supplied onwards)
The goods have not been supplied onwards or consumed before the date of registration
Condition for if the claim is for input tax suffered on goods purchased proper to registration (four years)
The VAT must have been incurred in four years prior to effective date of registration
What conditions must be satisfied if claim is for input tax suffered in the supply of services prior to registration (six months)
Services were supplied within six months prior to date of registration
What conditions must be satisfied if claim is for input tax suffered in the supply of services prior to registration (services supplied)
Services were supplied for purposes of a business whcih either was carried on or was carried on by them at time of supply
Input tax attributable to supplies made before registration
Not deductible even if input tax concerned is treated as having been incurred after registration
What happens when assets of a VAT registered business are sold?
Each asset will be subject to VAT at the appropriate rate
