Introduction to VAT

Question 1

What is VAT charged on?

Answer 1

• any supply of goods or services made in the UK
• where it’s a taxable supply
• made by a taxable person
• in the court or furtherance of any business carried on by that person

Question 2

key term - supply of goods/services

Answer 2

any supply made in the UK of goods or services done in return for consideration

Question 3

key term - made in the UK

Answer 3

the place of supply of the relevant goods or services must be in the UK
- there are complex rules for working out the place of supply for VAT purposes in cross-border transactions

Question 4

key term - taxable supply

Answer 4

any supply made in the UK which isn’t an exempt supply

Question 5

key term - taxable person

Answer 5

a person who is, or is required to be, registered for VAT purposes
- person includes individuals, partners, companies & unincorporated organisations

Question 6

key tern - in the course or furtherance of any business carried on by them

Answer 6

‘business’ (wide term) - any economy activity carried on, on a regular basis
- an employee’s services to an employer are excluded

Question 7

Are all of a person’s business activities included in one VAT registration?

Answer 7

Yes.

Question 8

key term - taxable business

Answer 8

a person who’s VAT registered or required to be VAT registered

Question 9

When is a person required to be registered?

Answer 9

• at the end of any month if the value of their taxable supplies in the period of one year