1
Q
calculation for vat amount payable (or repayable)
A
output vat - input vat
2
Q
what vat can be reclaimed
A
input vat can be reclaimed on goods and services brought for the business
3
Q
what vat cant be reclaimed
A
goods and services that are for non-business or personal use
business client entertaining
the purchase of a car (with a few exceptions)
goods and services that relate to exempt supplies.
4
Q
exempt supplies =
A
exempt input vat
5
Q
The meaning of the ‘de minimis’ amount is:
A
- The exempt input VAT must be less than £625 per month (on average).
- The exempt input VAT must be less than half of the total input VAT claimed.
6
Q
exempt input vat can only be reclaimed in full if
A
Amount of exempt input VAT below the ‘de minimis’ amount
7
Q
non employee entertaining VAT can only be claimed if
A
you are entertaining overseas customers
8
Q
input vat on the purchase of a car can be claimed if used mainly by who?
A
a taxi driver
a driving instructor
a business that is renting out cars for self-drive hire.
9
Q
when can a business reclaim vat on bad debt
A
- the debt is more than six months and less than four years and six months old
- the debt has been written off in the VAT account and transferred to a separate bad debt account
- the debt has not been sold or handed to a factoring company
- the business did not charge more than the normal selling price for the items.
10
Q
how do you claim bad debt relief
A
add the amount of VAT to be reclaimed to the amount of VAT being reclaimed on purchases (input tax) and put the total figure in Box 4 of the VAT return (VAT reclaimed in the period on purchases and other inputs).
11
Q
VAT registration is compulsory for a business if (2 awnsers)
A
for the past 12 months vat Is more than the current VAT registration limit of £90,000.
or
The business expects to go over the VAT threshold of £90,000 in a single 30 day period.
12
Q
what are stantard rated products
A
- these goods and services attract VAT at the current rate of 20%.
they are included in the turnover of VAT taxable goods and services.
13
Q
what are reduced-rated products
A
- these goods and services attract VAT at the current rate of 5%.
- they are included in the turnover of VAT taxable goods and services.
14
Q
what are zero-rated products
A
- these goods and services do not attract VAT -because the rate is 0%.
- however, they are included in the turnover of VAT taxable goods and services.
15
Q
what are exempt products
A
- these goods and services do not attract VAT because they are exempt.
- they are not included in the turnover of VAT taxable goods and services.
16
Q
when can you voluntarily deregister
A
if the turnover of VAT-able goods and services supplied within the UK for the past 12 months is below the current deregistration threshold of £88,000.
17
Q
when does a business compulsory deregister for vat
A
- the business ceases or intends to cease to make taxable supplies
- the business is sold
- the legal status of the business changes, for example a sole trader registers as a limited company.
18
Q
what buiness records must be kept ?
A
- annual accounts, including statements of profit or loss
- bank statements and paying-in slips
- cash books and other account books
- orders and delivery notes
- purchases and sales books
- records of daily takings such as till rolls
- relevant business correspondence and sales day books
19
Q
what VAT records must be kept
A
- records of everything brought and sold
- all credit notes and debit notes you receive
- records of any goods or services bought for which you cannot reclaim the VAT, such as business entertainment
- records of any goods you export
- any adjustments, such as corrections to your accounts or amended VAT invoices
- a VAT account.
20
Q
how long must you keep vat records
A
at least 6 years
21
Q
Under the normal VAT rules, businesses will pay VAT how often
A
quaterly
22
Q
what is the due date for submiting and paying VAT returns
A
1 month 7 days
23
Q
who can use the cash accounting scheme
A
businesses whoes estimated taxable turnover is less than £1.35m per annum. The scheme can be used until the taxable turnover reaches £1.6m per annum.
24
Q
what is the cash accounting scheme
A
In cash accounting scheme businesses will pay VAT on the amounts received from customers. Input VAT can be claimed on goods and services used once payment has been made.
25
who can use the annual accounting scheme
businesses whose estimated taxable turnover is less than £1.35m per annum. The scheme can be used until the taxable turnover reaches £1.6m per annum.
26
what is the annual accounting scheme
allows one VAT return to be completed each year, rather than the usual four.Payments to HMRC are made by installments, based on the previous year’s return. Once the annual return is complete a balancing payment is made or a balancing refund received.
27
what is the due date for a Vat return under the annual accounting scheme?
two months after the period end date.
28
who is eligible to use the flat rate scheme ?
businesses whose taxable turnover is less than £150,000 per annum. The scheme can be used until the taxable turnover reaches £230,000 per annum.
29
what is the flat rate scheme?
the VAT paid is a fixed percentage of the turnover (including VAT) of a business. This will include zero-rated and exempt sales.
30
what is a tax point
the time of a supply for VAT purposes. It fixes the point in time when a taxable supply takes place.
31
when should a vat invoice be issued
A VAT invoice must be issued within 30 days of the time of supply
32
when is the tax point for supply of services
the date all work is completed
33
when is the tax point for supply of good?
when either :
- the supplier sends the goods to the customer.
- the customer collects the goods from the supplier.
- the goods (which are not either sent or collected) are made available for the customer to use.
34
is a proforma a vat invoice
no and should be clearly marked " not a vat invoice"
35
The Actual tax point date may be earlier if?
- payment is received earlier
- invoice is issued earlier.
36
Actual tax point date may be later if ...
invoice is issued within 14 days of dispatch/service (and advance payment didn’t apply).
37
simplified invoice are only for
Invoices under £250
38
what is included in a simplified invoice
suppliers name, address and vat reg num
tax point
description
total payable amount
39
when is a trade discount deducted
before vat is calculated
40
how is prompt payment discount given
either as a credit note (w vat included )
customer claims the vat w discount taken out
41
The latest that a VAT return can be submitted to HMRC is?
one month and seven days after the vat quater end
42
The payment sent to HMRC is usually sent in
one month and seven days.
43
he exceptions to the vat payment timescale are:
the Annual Accounting Scheme
if a Direct Debit has been set up, then HMRC will take the money three working days after the last submission date.
44
Any changes to the VAT regime will be communicated in various ways by HMRC. These are ?
- writing to every VAT registered business
- emailing every VAT registered business
- updating GOV.UK website.
45
if vat payments are taking by direct debit it will be taken when?
Three working days after the submission due date
46
The errors can be corrected in the current VAT Return and not disclosed to HMRC if they are:
- below the reporting threshold
- not deliberate
- for an accounting period that ended less than 4 years ago.
47
what is the reporting threshold
- £10,000 or less, or
- for net errors between £10,000 and £50,000, up to 1% of the Box 6 figure (total value of sales and all other outputs excluding any VAT) for the period in which the error was discovered.
48
errors must be disclosed seperatly if they are
- between £10,000 and £50,000 (and greater than 1% of box 6)
- greater than £50,000
- an error you made on purpose (a ‘deliberate error’).
49
late submission penalty
- Each instance of late submission results in one penalty point
- once the specific penalty point threshold is crossed, an initial penalty of £200 is imposed.
- late submissions while at this penalty point threshold will result in an additional £200 penalty.
50
how to remove penalty points
- if not at threshold point will expire
- if threshold is met a business must have a period of compliance and all submissions due in the preceding 24 months have been made
51
pentlty point threshold for annual submission
2 points
52
pentlty point threshold for quaterly submission
4 points
53
period of compliance for annual submission
24 months
54
period of compliance for quarterly submission
12 months
55
what causes a first late payment penalty to be given
if Payments that are between 16 and 30 days late
56
how many days overdue causes a second late payment penalty
31 days or more
57
what is the first late payment penalty
2% on the VAT outstanding at day 15
58
what is the second late payment penalty
A daily rate based on 4% per annum charged every day from day 31 until paid in full.
59
what is charged after 31 days or more
- 2% on the VAT outstanding at day 15 and
2% on the VAT outstanding at day 30
- A daily rate based on 4% per annum charged every day from day 31 until paid in full.
60
what does FPS (full payment submission) provide
The FPS provides HMRC with all employee data relating to their pay.
61
when must FPS (full payment submission) be submitted
The FPS must be submitted on or before employees pay day.
62
what does EPS (employer payment summary) tell the hmrc
no employees were paid in the month
non-regular claims and adjustments are being made (for example, to claim the Employment Allowance).
63
what's is the monthly penalty amount for payroll penalties for a company with 1 to 9 employees
£100
64
when must EPS (employer payment summary) be submitted
by the 19th of the following tax month.
65
what's is the monthly penalty amount for payroll penalties for a company with 10 to 49 employees
£200
66
what's is the monthly penalty amount for payroll penalties for a company with 50 to 249 employees
£300
67
what's is the monthly penalty amount for payroll penalties for a company with 250 or more employees
£400
68
payroll penalties may not apply if...
- the FPS is late but all reported payments on the FPS are within three days of the employees’ payday (unless there is regular lateness)
- a new employer is late but sends the first FPS within 30 days of paying an employee
- it's a business’s first failure in the tax year to send a report on time.
69
what is the percentage charged on late payroll amounts per defaults
1to 3 - 1%
4 to 6 - 2%
7 to 9 - 3%
10 or more - 4%
70
dose first failure to pay in a tax year count
no
71
what is the penalty for payroll submissions being 6 months late
5% of unpaid tax
72
what is the penalty for payroll submissions being 12 months late
A further 5% of unpaid tax
73
what is taxable gross pay
Taxable gross pay is gross pay minus any tax-free elements, such as:
payroll giving donation
employee pension contributions.
Taxable gross pay is the figure on which the employee will pay income tax.
74
what is net pay
Net pay is taxable pay after all statutory deductions and non-statutory deductions have been made.
75
what are statutory deductions
Pay As You Earn (PAYE)
National Insurance Contributions (NICs)
pension contributions
student loan payments
76
what are non-statutory deductions
payroll giving
interest free loan made to the employee by the employer
other deductions authorized by the employee.
77
what is a p45
a tax from given to an employee when they leave employment
78
a p45 should include
personal details
leaving date
tax code
gross salary
tax deducted
79
what is a p60
a statement of tax and national Insurance (NI) contributions that have been deducted from an employee’s pay over the tax year
80
what is a p11d
outlines the cash value of any work-related taxable expenses and taxable benefits an employee has received over the tax year
81
how long should you keep records relating to vat
six years
82
how should vat records be kept
digitally
83
What is MTD
making tax digital
84
what goes into box 1 of vat return
VAT due on sales and other outputs
85
what goes into box 2 of vat return
VAT due on acquisitions from other EU countries
86
what goes into box 3 of vat return
Total VAT due ( sum of box 1&2)
87
what goes into box 4 of vat return
VAT reclaimed on purchases and other inputs
88
what goes into box 5 of vat return
Net VAT to pay or reclaim (box 3 - box 4)
89
what does a positive value in box 5 mean
you owe hmrc
90
what does a negative value in box 5 mean
you r due a refund
91
what goes into box 6 of vat return
Total value of sales and all other outputs (excluding VAT)
92
what goes into box 7of vat return
total value of purchases and all other inputs (excluding VAT)
93
what goes into box 8 of vat return
Total value of supplies of goods to EU member states (excl. VAT)
94
what goes into box 9 of vat return
Total value of acquisitions of goods from EU member states (excl. VAT)
95
How long must payroll records be kept for
3 years from end of the tax year they related to
96
Do deposit count towards the main tax point date
No deposits have a separate tax point date
Aat lvl 3
flashcards
Decks in class (4)
# Cards
