Test your understanding
(1). Nancy is in the process of completing her VAT return for the quarter ended 31 March 2014. 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). How much VAT will Nancy have to pay to HM Customs and Excise for this quarter?
(2). Alice commenced trading on 1 May 2013. During the period 1 May to 31 August 2013 her taxable supplies were £9,000 per month; during the period 1 September to 31 December 2013 they were £10,500 per month; and during the period 1 January to 30 April 2014 they were £12,000 per month. From what date will Alice be required to be registered for VAT?
A 1 March 2014
B 1 February 2014
C 1 April 2014
D 1 January 2014
(3). 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
(4). Jerome is a decorator. On 20 July 2013 he started a contract to decorate an office building, completing the contract on 23 August 2013. An invoice was issued for the full amount of the contract on 3 September 2013, and this was paid by the client on 10 November 2013. What is the tax point (date of supply) for this contract?
A 20 July 2013
B 23 August 2013
C 3 September 2013
D 10 November 2013
(5). Vong is completing her VAT return for the quarter ended 31 August 2013. By what date will the return have to be filed with HM Revenue and customs?
A 30 September 2013
B 7 October 2013
C 7 September 2013
D 31 August 2013
(6). Ming prepares VAT returns for the quarters ended 31 March, 30 June, 30 September and 31 December. On 10 May 2013 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 2013. 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 2013
B Input VAT of £1,000 for the quarter ended 30 June 2013, and output VAT of £1,600 for the quarter ended 30 September 2013
C Input VAT and output VAT of £1,000 for the quarter ended 30 June 2013, and output VAT of £1,600 for the quarter ended 30 September 2013
D Input VAT of £1,000 and output VAT of £1,600 for the quarter ended 30 September 2013
(7). Which VAT scheme provides automatic relief for impairment losses?
A The flat rate scheme
B None of the schemes
C The cash accounting scheme
D The annual accounting scheme