The following scenario relates to questions 26–30.
Alisa commenced trading on 1 January 2015. Her sales since commencement have been as follows:
January to April 2015 £7,500 per month
May to August 2015 £10,000 per month
September to December 2015 £13,500 per month
The above figures are stated exclusive of value added tax (VAT). Alisa only supplies services, and these are all standard rated for VAT purposes. Alisa notified her liability to compulsorily register for VAT by the appropriate deadline.
For each of the eight months prior to the date on which she registered for VAT, Alisa paid £240 per month (inclusive of VAT) for website design services and £180 per month (exclusive of VAT) for advertising. Both of these supplies are standard rated for VAT purposes and relate to Alisa’s business activity after the date from when she registered for VAT. After registering for VAT, Alisa purchased a motor car on 1 January 2016. The motor car is used 60% for business
From what date would Alisa have been required to be compulsorily registered for VAT and therefore have had to charge output VAT on her supplies of services?
((7,500 + 10,000) x 4) + 13,500 = £83,500.
The historic test is met by 30 September 2015. Alisa should therefore have notified HMRC by 30 October 2015, with registration effective from 1 November 2015.
What amount of pre-registration input VAT would Alisa have been able to recover in respect of inputs incurred prior to the date on which she registered for VAT?
((240 x 20/120) + (180 x 20%)) x 6 = £456.
What is the maximum amount of input VAT which Alisa can reclaim in respect of her motor expenses for the quarter ended 31 March 2016?
(456 + 624) x 20/120 = £180.
How and by when does Alisa have to pay any VAT liability for the quarter ended 31 March 2016?
All businesses must make their VAT payments electronically and this must be done no later than one month and seven days after the end of the quarter, i.e. 7 May 2016.
Which of the following items of information is Alisa NOT required to include on a valid VAT invoice?
A customer’s VAT registration number is not required to be included on a valid VAT invoice.