TPFB Recap chapters 1 to 4

A business makes standard rates sales at a VAT exclusive amount of £200.00 and an exempt sale of £25 can a simplified invoice be issued

• Yes

• No

Answer explanation

The combined amount of the sale is £240 + £25 so this is more than £250.

A business purchases a Van for £14,000 and a car for £12,500 both VAT exclusive figures how much VAT can be reclaimed?

• £4,416.67

• £5,300

• £2,800

Answer explanation

Only the VAT on the Van can be reclaimed and £14,000 is the VSAT exclusive figure so £14,000 * 0% = £2,800

What does Partial exemption mean?

• A trader only sells exempt goods

• A trader only sells zero rated goods

• A trader only makes taxable supplies

• A trader sells a mix of taxable supplies and exempt supplies

A company send a pro forma invoice to a customer on the 2nd April the customer pays this on the 5th April and the goods are delivered on the 7th of April a VAT invoice is then sent to the customer on the 15th of April what is the tax point?

• 2nd April

• 5th April

• 7th April

• 15th April

Answer explanation

The basic tax point is the 7th April however the goods are paid for before this date s this becomes the actual tax point. A proforma is not a tax invoice so no tax point is created

A credit not is received from a supplier for some damaged goods what is the effect on VAT?

• Input Tax increases

• Input tax decreases

• Output tax decreases

• Output tax increases

Answer explanation

A credit note relates to a purchase so it reduces the Input tax we can claim

How long should a business keep its tax records for?

• 1 year

• 6 years

• 5 years

• 3 years

If a trader has a VAT query where should they first go to resolve the query?

• Write a letter to HMRC

• Email HMRC

• Call the VAT helpline

• HMRC website