VAT

Question 1

Reduced rates supplies

Answer 1

Domestic fuel or power (or charity use)
Qualifying security goods
Women’s sanitary products
Contraceptives and nicotine patches
Children’s car seats

Question 2

Zero rated supplies

Answer 2

Food (excluding luxury items like sweets)

Sewerage and water

Books and newspapers (but stationary is standard rated)

Transport where vehicle is designed to carry more than 11 people

Clothing and footwear for children and protective boots and helmets

Sales by charities of donated goods

Imports and exports

Prescribed drugs and medicines

Question 3

Registration

Answer 3

Compulsory Registration when turnover exceeds £85,000 in a 12 month period, notification to hmrc must be within 30 days

Question 4

Pre registration

Answer 4

Input tax can be claimed on stocks (inventory) and capital assets purchased in previous 4 years

Services supplied for the purpose of the business in the previous 6 months

Question 5

De-registration

Answer 5

If taxable supplies for the next 12 month period will not exceed £83,000

VAT must be accounted for on all stocks and capital assets in a business on which VAT has be reclaimed unless under £1000

Question 6

Payments on account

Answer 6

VAT registered businesses with annual VAT liability of more than £2.3 million are required to make payments on account

Calculated by dividing annual VAT liability by 24