VAT Flashcards
Basics of vat
Administered by HMRC
Charged in the supply of taxable goods and services
2 mains rates 20% and 5%
Also a 0 rate exemption for banking, insurance and other examples
must charge customers vat which is output VAT
Which can be offset against input VAT
If paid input vat then output then they can reclaim the excess
Registration
All traders must be registered if the value of their taxable supplies is more than a set threshold. 85k or where they believe they are likely to exceed this limit in the next 30 days.
Can voluntary register if significant input vat and limited output VAT
Exempt a 0 rated supplies
Exempt supplies include - books, medicine, children clothing, air fares!! Water…
A small business maybe able to reclaim all input vat provided input vat attributed to their exempt supplies does not exceed 7.5k
Special schemes
Flat rate scheme vat - simplifies vat
How to qualify - vat taxable turnover (everything that is sold that is not exempt) of less than 150k. If exceeds 230k then cannot have it
Generally vat returns are every 3 months, big companies monthly
