Intro To Vat And Vat Basics

Question 1

Input vat or input tax

Answer 1

Vat on purchases of goods and payment of expenses. This is reclaimed by the business from HMRC

Question 2

Output vat or output tax

Answer 2

Vat in sales of goods and provision of services. This is paid by the business to HMRC

Question 3

Exempt supplies

Answer 3

Supplies on which no VAT is charged

Question 4

Registration

Answer 4

• must be taxable supplies
• exceed reg limits or wants to
• vat charged on supplies from date of registration

Question 5

Standard and zero rated

Answer 5

Goods and services which are taxable at a rate of 20%

Goods and services which are taxable but the rate of tax is 0%

Question 6

Taxable turnover

Answer 6

This is the VAT-exclusive lvl of standard-rated, reduced rate and zero-rated sales, but exceeds exempt sales