(1). C The basic tax point for services is the date they are completed (23 August 2023), but this is replaced by the invoice date (3 September 2023) where the invoice is issued within 14 days of the basic tax point.
(2). B VAT has to be accounted for according to the date the goods are imported. The import VAT is declared on the VAT return as output VAT, but can be reclaimed as input VAT on the same VAT return.
(3). C A VAT registered business must issue a VAT invoice when it makes a standard rated supply to a VAT registered customer.
(4). C It is not necessary to include the customer’s name and address on a simplified VAT invoice.
(5). A An error which is less than the higher of £10,000 (or 1% of turnover for the current VAT quarter) can be voluntarily disclosed by entering it on the current VAT return.
(6). A The registration limit of £85,000 was exceeded during September 2023 ((9,000 x 4) + (10,500 x 4) + 12,000 = £90,000), so Alice would have been required to have registered for VAT from 1 November 2023.
(7). D Pre-registration input VAT in respect of goods is recoverable if the goods were acquired in the four years prior to registration, were not sold or consumed prior to registration and were acquired for business purposes.
(8). B Output VAT is £13,380 (66,900 x 20%) and input VAT is £3,200 (19,200 x 20/120), so VAT of £10,180 (13,380 – 3,200) is payable to HMRC.
(9). B VAT returns have to be submitted within one month and seven days of the end of the relevant quarter.
(10). A Use of the cash accounting scheme results in automatic relief for impairment losses.