BLP Corporation Tax Flashcards
(31 cards)
Made in the UK meaning for VAT
The place of supply of the relevant goods or services must be in the UK.
What is a ‘taxable supply’?
Any supply made in the UK which is not an exempt supply (includes standard, reduced and zero-rated supplies)
What is a ‘taxable person’?
A person who is, or is required to be, registered for VAT (includes individuals, partnerships, companies, unincorporated bodies)
In the course of furtherance of any business carried on by him
Basically any economic activity carried on on a regular basis. An employee’s services to an employer are excluded. All of a person’s business activities are included in one VAT registration
What is VAT charged on?
Any supply of goods or services in the UK
where it is a taxable supply
made by a taxable person
in the course or furtherance of business carried on by that person
What is the VAT registration threshold (2024–25)?
£90,000 in taxable turnover over the past 12 months or expected in the next 30 days
When must someone notify HMRC of mandatory VAT registration?
Within 30 days of the end of the relevant month or 30-day period
What is the VAT deregistration threshold (2024–25)?
£88,000
Can a person register for VAT voluntarily below the threshold?
Yes — to reclaim input VAT - but also means they will have to charge output VAT on supplies of goods and services to customers - may make them look less attractive to customers than its unregistered competitors
What is ‘output tax’?
VAT charged by a business on its taxable supplies
What is ‘input tax’?
VAT paid by a business on goods or services it purchases
How is VAT liability calculated?
Output VAT – Input VAT = Amount payable to HMRC
Can input VAT be reclaimed if no output VAT is charged in the accounting period?
Yes — input VAT can be reclaimed if it is intended that output VAT will be charged in future periods.
What is the VAT rate for standard-rated supplies?
20%
What are the four types of supply?
Standard-rated, Reduced-rated, Zero-rated, Exempt
What is the VAT rate for reduced-rated supplies?
5%
What are examples of reduced-rated supplies
Domestic heating and power, installation of mobility aids for the elderly, smoking cessation products, children’s car seats.
What are examples of zero-rated supplies?
Food (within certain categories), children’s clothes, books, the construction of new houses, public transport, sewerage and water, newspapers, talking books for the blind
Is zero-rated supply exempt from VAT?
No — it is a taxable supply at 0% (input VAT is recoverable)
What are examples of exempt supplies?
insurance, finance, education/health services, the sale of land and buildings (unless it comprises a new commercial building or the supplier of a commercial building has chosen to make the supply standard rated by waiving the exemption)
How do you calculate the VAT element of a VAT-inclusive price at 20%?
Use the fraction 1/6 of the total price
What must be issued within 30 days for VATable B2B transactions?
A VAT invoice
How often must VAT returns be submitted?
Every three months
What is the deadline for submitting a VAT return?
One month and 7 days after the end of the VAT period
