Business: Calculating Profits and paying VAT

Question 1

Difference between zero-rated and exempt from VAT

Answer 1

Zero rated means you can claim back any VAT you have paid.

Exempt however means you cannot claim back any VAT you have paid.

Question 2

When do you need to register and charge VAT?

Answer 2

If you are making taxable supplies of more than £90,000 pa you must register and charge VAT, those making less have the option to but not obliged.

Question 3

Calculating trading profit formula

Answer 3

Chargeable receipts LESS deductible expenditure LESS capital allowances.