VAT Flashcards
Chapter 23 and 24 (17 cards)
what is the definition of VAT
an indirect tax suffered on most goods and services by consumers collected by businesses on behalf of HMRC
input VAT
VAT which businesses pay on their purchases of goods and services which is reclaimable by HMRC
registered businesses charge VAT on their goods and services
output VAT
zero rate taxable supply
nil rate - no VAT is charged however, it is classified as a taxable rate of supply
reduced rate of supply
some supplies for domestic or charitable use are supplied at a reduced rate of tax
standard rate of supply
any taxable supply not charged at zero or reduced rate at standard rate 20%
tests for compulsory registration
- historic turnover: if total taxable supplies exceeds 90,000 in past 12 months - HMRC must be notified within 30 days
- future prospects: when taxable supplies in the next month is insolation are expected to exceed 90,000
compulsory deregistration
company must deregister for VAT when they cease making taxable supplies
voluntary deregistration
company may deregister voluntarily if there is evidence taxable supplies in the next 12 months will not exceed 88,000
situations where the BTP may be overridden
if tax invoice is issused or payment received before BTP, then it becomes new BTP
if tax invoice is issued within 14 days of BTP then it becomes new BTP
VAT inclusive
1/6*cost=VAT exclusive
irrecoverable input VAT
- business entertainment
- cars unless 100% for business or leased in which case 50% is recoverable
claim for irrecoverable debt relief date
4 years and 6 months
deadline for filing and paying VAT electronically is
one month and 7 days after return period (usually quarterly for businesses)
VAT refund claim date
VAT refunds are usually made within 30 days - where discovered overpayment, claim for return can be made within 4 years
VAT records and documents must be kept for how long
must be preserved for 6 years
penalty per late return
200
