(1). Jerome is a decorator. On 20 July 2018, he started a contract to decorate an office building, completing the contract on 23 August 2018. An invoice was issued for the full amount of the contract on 3 September 2018 and this was paid by the client on 10 November 2018.
What is the tax point (date of supply) for Jerome’s decorating contract?
A 20 July 2018
B 23 August 2018
C 3 September 2018
D 10 November 2018
(2). Ming Prepares VAT returns for the quarters ended 31 March, 30 June, 30 September and 31 December. On 10 May 2018, she purchased standard rated goods costing £5,000 from a supplier situated outside the European Union. The goods were sold for £8,000 on 2 August 2018. These figures are exclusive of VAT.
What entries will be made on Ming’s VAT returns in respect of these goods?
A Output VAT of £1,600 for the quarter ended 30 September 2018
B Input VAT of £1,000 for the quarter ended 30 June 2018, and output VAT of £1,600 for the quarter ended 30 September 2018
C Input VAT and output VAT of £1,000 for the quarter ended 30 June 2018, and output VAT of £1,600 for the quarter ended 30 September 2018
D Input VAT of £1,000 and output VAT of £1,600 for the quarter ended 30 September 2018
(3). In which circumstances will a VAT registered business be required to issue a VAT invoice?
A When a standard rated supply is made to any customer
B When any type of supply is made to any customer
C When a standard rated supply is made to a VAT registered customer
D When any type of supply is made to a VAT registered customer
The following scenario relates to questions 4–8.
Alice commenced trading on 1 January 2018. During the period 1 January to 30 April 2018, her taxable supplies were £9,000 per month; during the period 1 May to 31 August 2018, they were £10,500 per month; and during the period 1 September to 31 December 2018, they were £12,000 per month.
Alice is now in the process of completing her VAT return for the quarter ended 31 March 2019. During the quarter, sales invoices totalling £66,900 (exclusive of VAT) were issued in respect of standard rated sales, whilst standard rated expenses amounted to £19,200 (inclusive of VAT).
Required:
(4). From what date was Alice required to be registered for VAT?
A 1 November 2018
B 1 October 2018
C 1 December 2018
D 1 September 2018
(5). Which one of the following is not a condition for the recovery of pre-registration input VAT incurred in respect of goods?
A The goods must have been acquired within four years of registration
B The goods must have been acquired for business purposes
C The goods must not have been sold or consumed prior to registration
D The goods must have been paid for prior to registration
(6). How much VAT will Alice have to pay to HM Revenue and Customs in respect of the quarter ended 31 March 2019?
A £9,540
B £10,180
C £7,950
D £7,310
(7). By what date will Alice’s VAT return for the quarter ended 31 March 2019 have to be filed with HM Revenue and Customs?
A 30 April 2019
B 7 May 2019
C 7 April 2019
D 31 March 2019
(8). Which VAT scheme would provide Alice with automatic relief for impairment losses?
A The cash accounting scheme
B The flat rate scheme
C The annual accounting scheme
D None of the schemes