Green Light Tests

Question 1

Latest date a supplier can issue a VAT invoice?

Answer 1

Within 30 days of Tax Point

Question 2

Watch out for … when giving date for required VAT registration…

Answer 2

It is 30 days.

Not EOM following.
Multiple choice answers may include eg 30/07 and 31/07 so GET IT RIGHT no SILLY MISTAKES

Question 3

For Flat rate scheme taxable turnover must not exceed ?

Answer 3

£150K

Question 4

Annual accounting scheme … when is due date?

Answer 4

2 months from end of VAT period.

This time it is an EOM type date

Question 5

What is the future turnover method

Answer 5

Must register within 30 days of exceeding the limit (past turnover method), or if it is likely to within the next 30 days. (Future turnover method)

Question 6

VAT invoice must show

Answer 6

Total amount payable excluding VAT.
VAT Registration Number of Seller.
Rate of any PP discount.

Question 7

Customer collects goods on 01/08 and biz issues invoice on 10/08. What is Tax Point?

Answer 7

10/08

The invoice date. because it’s issued within 14 days it becomes Actual Tax Point.

Question 8

Customer pays on 02/07 ;
supplier sends goods 09/07.
Supplier issues invoice on 15/07

What is Tax Point?

Answer 8

02/07 - Date of payment.

Because it was received in advance of goods being supplied and invoice being issued.

Question 9

Customer pays on 02/07 and supplier sends on 09/07.

What is latest date for issuing VAT invoice?

Answer 9

31/07.

Within 30 days from Tax Point. (Tax point day is ‘Day 1’ for counting purpose.)

Question 10

When using the Cash accounting scheme for VAT. What to remember about part payments?

Answer 10

Means tax may be included in more than one period.
Just take the payment dates (not invoice date since this is CASH scheme) and the relevant tax must be included in the relevant period..

Question 11

Edwin sells standard rated goods and in the next 30 days expects the annualised value of supplies to be £90k in the next 30 days alone

Answer 11

Yes. register

Question 12

Reasons for voluntary registration.

Answer 12

Taxable supplies are zero-rated and related purchases are standard. (Publisher)

Biz paid for major project eg refurb

On set up of biz lots of initial cost and not much sales.

Question 13

Deregistration voluntary

Answer 13

Last 12 months below current deregistration threshold of £83k.

Must notify HMRC of date wish to deregister but must charge vat until receives confirmation.

Question 14

Deregistration compulsory

Answer 14

• biz ceases or intends to cease making taxable supplies.
• biz is sold
• Legal status of biz changes, eg sole trader registers as ltd company.

Question 15

Normally businesses pay VAT quarterly on standard rated sales.
(Regardless of customer payment)
Input VAT can be reclaimed even if payment has not been made.

Answer 15

.

Question 16

Due date for payment and submission is 1 month after end of period. Increased by 7 days if submitted online and pay electronic.

DD is taken 3 days later whereas Bacs has to hit by 7th

Answer 16

.

Question 17

Cash accounting scheme

Answer 17

Estimated taxable turnover < £1.35 million.
Can be used until turnover reaches £1.6 million.

Relates to payments received and paid.

Due date same as normal.

No adjustment for bad debt as relief is automatic

Question 18

Annual accounting scheme

Answer 18

Estimated taxable turnover < £1.35 million.
Can be used until reach £1.6 million

1 vat return per year. (DD is 2 calendar months after period end)

Payment instalments based on prev year’s return. Balancing pmt or ref.

Question 19

Flat rate scheme

Answer 19

Taxable turnover < £150K
Can be used until reaches £230K

Fixed % of GROSS turnover
and Including Zero-rated and EXEMPT sales.

% depends on type of biz.

No reclaim of input vat unless Capex over £2K

If biz is a limited cost % is 16.5 regardless of type.
Define limited cost:
*Goods cost less than 2% of turnover.
*Goods cost more than 2% but are less than £1K p/a.

Due date same as normal

Question 20

A VAT invoice must be issued when….

Answer 20

Within 30 days of the earlier of time of supply and payment.

Question 21

To fix the date of physical supply, take the date ALL the work is completed.

Answer 21

.

Question 22

For goods, the time when goods are considered to be supplied for VAT purpose is the date when one of 3 things happens

Answer 22

The supplier sends the goods.

The customer collects the goods.

The goods are made available for the customer to use. Eg on assembly.

Question 23

Remember these rules

• Where a VAT invoice is issued Tax Point is usually Date of Issue, provided this is either before, or within 14 days of, the Date of Supply.
• VAT invoices must be issued within 30 days of whichever is earlier: Date of Supply or Date of Payment.

Answer 23

Complications in assessment:

• Proforma invoices. These can be ignored for the purpose of determining tax points and latest dates for issue.
• Full payment in advance of supply.
• Part payment in advance, in which case 2 Tax Points.
• Invoicing later than 14 days after supply, in which case Tax Point is whichever earlier: Date of Supply or Date of advance payment.