问答题
4.Zim has been registered for value added tax (VAT) since 1 April 2005. The following information is available for the year ended 31 March 2015:
(1) Sales invoices totalling ￡126,000 were issued, of which ￡115,200 were in respect of standard rated sales and ￡10,800 were in respect of zero rated sales. Zim’s customers are all members of the general public.
(2) On 31 March 2015, Zim wrote off two impairment losses which were in respect of standard rated sales. The first impairment loss was for ￡780, and was in respect of a sales invoice which had been due for payment on 15 August 2014. The second impairment loss was for ￡660, and was in respect of a sales invoice which had been due for payment on 15 September 2014.
(3) Purchase invoices totalling ￡49,200 were received, of which ￡43,200 were in respect of standard rated purchases and ￡6,000 were in respect of zero rated purchases.
(4) Rent of ￡1,200 is paid each month. During the year ended 31 March 2015, Zim made 13 rental payments because the invoice dated 1 April 2015 was paid early on 31 March 2015. This invoice was in respect of the rent for April 2015.
(5) During the year ended 31 March 2015, Zim spent ￡2,600 on mobile telephone calls, of which 40% related to private calls.
(6) During the year ended 31 March 2015, Zim spent ￡1,560 on entertaining customers, of which ￡240 was in respect of overseas customers.
All of the above figures are inclusive of VAT where applicable. The expenses referred to in notes (4), (5) and (6) are all standard rated.
Zim does not use either the cash accounting scheme or the flat rate scheme. He has forecast that for the year ended 31 March 2016, his total sales will be the same as for the year ended 31 March 2015.
Required:
问答题
(a)Calculate the amount of value added tax (VAT) payable by Zim for the year ended 31 March 2015.
Note: You should indicate by the use of zero any items referred to in notes (1) to (6) where there is no VAT impact.(6 marks)
【正确答案】
Tutorial notes:
(1) Relief for impairment losses is given once six months have expired from the time when payment was due, so relief can be claimed in respect of both impairment losses.
(2) Rent is a continuous supply, so the tax point for the April 2015 rental invoice is the date of payment.Therefore, input VAT is recoverable in respect of all 13 rental payments.
(3) An apportionment is made where a service such as the use of a telephone is partly for business purposes and partly for private purposes.
(4) Input VAT on business entertainment is not recoverable unless it relates to the cost of entertaining overseas customers.
【答案解析】
问答题
(b) Explain why Zim will be permitted to use the VAT flat rate scheme from 1 April 2015, and state the circumstances in which he will have to leave the scheme. (2 marks)
【正确答案】(1) Zim can join the flat rate scheme from 1 April 2015 because his taxable turnover (excluding VAT) for the next 12 months is not expected to exceed ￡150,000.
(2) He can continue to use the scheme until his total turnover (including VAT, but excluding sales of capital assets) for the previous year exceeds ￡230,000.
Tutorial note: It is also necessary to leave the flat scheme if total turnover is expected to exceed ￡230,000 during the following 30 days. Although candidates are not expected to be aware of this point, equivalent marks were awarded if this was given instead of the previous year limit.
【答案解析】
问答题
(c) Explain whether or not it would have been beneficial for Zim to have used the VAT flat rate scheme for the year ended 31 March 2015.
Notes:
1. You should assume that the relevant flat rate scheme percentage for Zim’s trade would have been 12% throughout the whole of the year ended 31 March 2015.
2. Your answer for this part of the question should be supported by appropriate calculations. (2 marks)
【正确答案】(1) Using the flat rate scheme to calculate his VAT liability, Zim would have paid VAT of ￡15,120 (126,000x 12%) for the year ended 31 March 2015.
(2) It would therefore not have been beneficial to use the flat rate scheme as the additional cost of ￡6,260(15,120 – 8,860) for the year would appear to outweigh the advantage of simplified VAT administration.
【答案解析】