Indirect Tax Revision 2

A business sells only exempt goods with a value of £95,000 from the last 12 month period

Which statement is correct from the options below

• The business must register for VAT immediately as it has exceeded the VAT registration threshold

• The business cannot register for VAT

• The business can voluntarily register for VAT

• The business must de-register from VAT

• The business has exceeded the VAT registration threshold by £10,000 and will now repay the 20% VAT that should have been collected

The following information is available about an invoice issued by a VAT registered business

- A customer places and pays in full for an order on 1 September

- The goods are delivered on 5 September

- An invoice is sent on 7 September

For VAT purposes, what is the tax point for this transaction?

• 1 September

• 5 September

• 7 September

• 30 September

A VAT registered business is operating a single special accounting scheme for VAT. The characteristics of the scheme are as follows:

- The business has an annual turnover of £550,000

- The business cannot reclaim bad debt relief on this scheme

- Output tax is only paid to HMRC when the payment has been received from the customer

- Input tax is only reclaimed from HMRC when it has been paid to suppliers

What type of scheme is being used?

• Regular accounting

• Cash accounting scheme

• Annual accounting scheme

• Flat rate accounting scheme

A business has discovered an error from a previous VAT return that will need to be adjusted in the upcoming VAT return

The error relates to VAT of £13,000 on a sales invoice that was not recorded in the last return. The quarterly turnover of this business is: £1,245,000

From the options below, what should be the next steps for the business

• Make the adjustment in the upcoming VAT return as no separate voluntary disclosure/Form VAT 652 is required

• The business does not need to make any adjustment to the error

• Partially adjust the error in the upcoming VAT return and declare the remaining part of the error with a separate disclosure/Form VAT 652

• No adjustment made in the upcoming VAT return. Separate voluntary disclose/Form VAT 652 will be required to report the error

A business supplies one of its customers with standard-rated goods with a VAT inclusive figure priced at £240.

What is the separate net and VAT amounts for this transaction?

• Net £200

  VAT £40

• Net £192

  VAT £48

• Net £40

  VAT £200

• Net £240

  VAT £48