CTA VAT 19 - 25

Question 1

Key elements of export

(NI trader sells good to customer outside EU)

(GB trader sells good to customer in EU or outside EU)

Answer 1

1. It is a UK supply
2. Zero rated
3. Evidence of export movement required (airway bill etc)

Question 2

Key elements of imports

(NI trader buys goods from outside EU)

(GB trader buys goods from EU and non EU)

Answer 2

1. No UK supply
2. Import VAT payable by UK importer

*Import VAT can be paid or deferred via duty deferment account

Question 3

UK VAT registered traders can account for import VAT under PVA.

What does this mean?

Answer 3

The VAT can be declared as output VAT on the VAT return and not paid at the time of import.

For a fully taxable business, the import VAT is recoverable as input tax, so there is no net tax due

Question 4

Key elements of Dispatches

(NI trader sells goods to customer in EU)

Answer 4

If EU customer has VAT number:

• Zero rate, UK place of supply

If EU customer no VAT number:

• Charge UK rate, UK place of supply

Question 5

Key elements of acquisitions

(EU supplier supplies goods to NI trader)

Answer 5

• No UK supply
• Acquisition VAT due from UK VAT customer

-EU VAT charged if UK customer not VAT registered

Question 6

What are the specific tax points for acquisitions?

Answer 6

EARLIER OF :

1. 15th of the month following the month where goods arrived
2. date on which invoice was issued

Question 7

The Intrastat (or SSD) is required if the total value of dispatches exceeds … and if acquisitions exceeds…

When must the Intrastat be completed and submitted by?

Answer 7

£250,000 in value

£1,500,000

The 21st of the month following the month of the dispatch or acquisition

Question 8

What does an EC Sales List show?

When must it be submitted?

Answer 8

The value of supplies made to each customer, with each customer being identified by their VAT registration number

Within 14 days of the end of the period for paper returns or 21 days for electronic returns

Question 9

Services supplied B2B are treated as being supplied…

Services supplied B2C are treated as being supplied

Answer 9

in country where recipient belongs

in country where supplier belongs

*Schedule 4A has exemptions - land, cultural events, accountants

Question 10

Supplies of new (under 3 yr old) commercial freehold is

Answer 10

Standard rated

Question 11

Other examples of L&B SR supplies are:

Answer 11

1. Right/license to fish
2. Provision of accommodation in hotel
3. Caravans / camping
4. Car parks
5. Seat at sports ground, theatre etc
6. Rent of hairdresser chair and self storage

Question 12

What three ways can you revoke an option to tax?

Answer 12

1. In first 6 months provided it promises to repay any input tax deducted
2. It automatically lapses after six years since having a relevant interest in land
3. Trader can revoke option 20 years after making with HMRC permission

Question 13

Once an option to tax has been made, you must notify HMRC within

Answer 13

30 days of being made

Question 14

Capital goods scheme (input tax recovery) on :

1. Land and buildings
2. Computers, ships, aircrafts

Answer 14

1. Costing £250,000 or more - over 10 years
2. Costing £50,000 or more over 5 years

Question 15

The formula for calculating CGS is:

Answer 15

Total VAT on purchase x (initial % - Actual %) / Number of years (5 or 10) = CGS adjustment

*made in second VAT return following end of VAT year

Question 16

CGS additional sale adjustment formula is:

Answer 16

Total VAT on purchase x (Initial % - 100% OR 0%) / Number of years (5 or 10) x Number of years left

Question 17

TOGC conditions (x5) :

Answer 17

1. Same kind of business
2. Transferor VAT registered and transferee is also, or will become as a result of transfer
3. If only a part, it must be capable of separate operation
4. No significant break in trading
5. No consecutive transfers of the business