Topic 1 VAT and Taxes

Which tax is paid by people when they buy something?

• Income tax

• Property tax

• VAT

• Inheritance tax

Which of the following is not subject to VAT?

• Standard rate items

• Reduced rate items

• Exempt items

• Zero rate items

What is the primary purpose of VAT?

• To increase business profits

• To fund government services

• To reduce consumer spending

• To support small businesses

Which of the following is a non-taxable supply?

• Standard rate supply

• Reduced rate supply

• Exempt supply

• Zero rate supply

What is the difference between a business' output VAT on sales and input VAT on purchases used to determine?

• The amount of profit

• The amount payable to or repayable from HMRC

• The total sales revenue

• The total purchase cost

How are supplies categorized under VAT?

• Taxable and exempt supplies

• Domestic and international supplies

• Physical and digital supplies

• Wholesale and retail supplies

What type of supplies include domestic fuel like electricity and gas?

• Zero-rated

• Exempt

• Reduced-rated

• Standard-rated

Who is unable to reclaim VAT on purchases and expenses?

• VAT-registered businesses

• General public and non-VAT-registered businesses

• Exporters

• Importers