Indirect Tax

A VAT registered business receives an order for goods from a customer on the 4th May. The goods are delivered on the 15th May and on the 20th May a tax invoice is issued. The customer pays on the 28th June.

What is the tax point date?

• 4th May

• 15th May

• 20th May

• 28th June

What effect on the amount of VAT payable to HMRC will a credit note to a customer of £40 plus standard rated VAT have?

• The amount payable will decrease by £40

• The amount payable will increase by £40

• The amount payable will decrease by £8

• The amount payable will increase by £8

Traders who make zero rated supplies are making taxable supplies and can register for VAT

• True

• False

You are given a purchase cost of £136 (VAT inclusive at standard rate).

Which of the the following will give you the VAT element of the cost?

• Divide by 5

• Divide by 1/6

• Divide by 6

• Divide by 1/5

Bad debt relief is entered into which box on the VAT return

• 1

• 2

• 4

• 5

You can reclaim the VAT on business entertainment of overseas customers?

• Yes

• No

What is the total output amount on two invoices on sales of standard- rated items:

To Red Ltd (amount exclusive of VAT) £750

To Black Ltd (amount inclusive of VAT) £562

• £262.40

• £218.66

• £237.40

• £243.66

How many days extra do you get to pay if you the VAT owed to HMRC pay by Direct Debit

• 3 working days

• 7 working days

• No extra days

Which of the following statements on the subject of cash accounting are true

• Input VAT is reclaimed by reference to the date the supplier is paid

• Traders can join the scheme provided their annual taxable turnover does not exceed £1,600,000

• VAT invoices do not need to be sent to customers

• Traders can only join the scheme provided their annual taxable turnover does not exceed £1,350,000

Why is a VAT registration certificate important - ONE answer

• It is proof that the business has started to trade

• It is proof that the business is entitled to charge output VAT

• It is proof of the trader's VAT registration number