Assignment on Indirect Tax Sample
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Added on 2020-10-23
Assignment on Indirect Tax Sample
Added on 2020-10-23
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INDIRECT TAX
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Source of information on VAT..............................................................................................11.2 Interaction of organisation with government agency.............................................................11.3 VAT registration requirements..............................................................................................21.4 Information required to considered for business documentation of VAT registered business......................................................................................................................................................21.5 Requirements and the frequency of reporting for VAT schemes..........................................31.6 Up to date knowledge of changes to codes of practice, regulation or legislation..................3TASK 2............................................................................................................................................42.1 relevant data for a specific period form the accounting system.............................................42.2 Calculation of input and outputs using the VAT classification.............................................52.3 Calculation of the VAT due to, or form the relevant tax authority........................................62.4 VAT return and associated payment with in the statutory time limits..................................6TASK 3............................................................................................................................................73.1 The implications and penalties for an organisation resulting from failure to abide by VATregulations....................................................................................................................................73.2 Adjustments and declarations for any errors or omission identified in previous VATperiods..........................................................................................................................................8TASK 4............................................................................................................................................94.1 Inform the managers of the impact that the VAT payment may have organisations cashflow..............................................................................................................................................94.2 VAT legislation which would have an effect on an organization's recording systems.......10CONCLUSION .............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONIndirect tax is being considered as a tax (charge/levied) over services/goods rather thanon any profits or income of an individual (Bahl, 2018). Tax reforms, legislations and standardsare defined in context to VAT. The procedure of business documentation and reporting underValue Added Tax schemes are defined in this report. Requirements of filing VAT returns inadequate manner with classification of Value-Added Tax information presented clearly for aspecific period from the accounting system. Penalties and adjustments regarding past returns anderrors justified with in VAT period. Ways to execute Value-added Tax information amongmanagers communicated with impact of VAT payment. Variations in VAT legislations that havean impact on an organisation's recording system are also considered in this report. TASK 11.1 Source of information on VATValue-added tax (VAT) can be defined as an intake tax that is being applied over aproduct at the time when value is basically added at every phase of supply chain, production andat time of sale. It is being found that VAT, is paid by an individual on cost of a product. Thereare type of sources available to get information regarding VAT are as follows;European commission: It is the governing body that is responsible for introducinglegislations, upholding the the treaties, implementing decisions to day to day business inEuropean union. This commission provides VAT information. It contains the invoicing details,charging events, taxable persons, deductions and the VAT return procedures.The Value - Added Tax and Alternative Sources of Federal Revenue: This is one ofthe supporting source of getting the information related to payment of VAT and submission ofreturn.HM revenue and customs: This is the non ministerial department of the UKgovernment. This is one of the the source of getting information regarding collection of VAT,other nominal charges and taxes.1.2 Interaction of organisation with government agencyBusiness organisations have direct relation with government agencies. Organisation haveto take assistance of government agencies to deal with new rules and legislations introduced inthe UK. Retails and manufactures comes in this category to communicate the VAT requirements.1
Organisations interact with government agencies through formal communication medium. Forexample, A manufacturer can communicate have to apply for VAT registration for come inexistence in the eyes of government (Cnossen, 2013). 1.3 VAT registration requirementsVAT registration is required if the turnover of the organisation exceeds form £85000.VAT registration is Mandatory if taxable turnover is found more than £85000 in the next 30 dayperiod or if organisation had a VAT taxable turnover more than £85000 over the last 12 months.For instance of future traders occurs taxable turnover during 1st April 2017 and 31th March 2018than Future Traders have to register for VAT till 30th April 2018. and effective date will be 1stMay 2018. Registration of VAT is done by filling form online as well as offline too, mostly businessentities such as partnership firms or companies opt for online registrations for themselves.Organisation can register through agents just to provide necessary information like VAT returns(Capéau, Decoster and Phillips, 2014). After registration company get their value added taxnumber from HM Revenue and Customs (HMRC). such as VAT1A form provided for those whoare distance sellers, VAT1B I for importers and VAT1C if company wants to dispose theirassets. After completion of VAT registration organisations receive their VAT certificates within30 working days. It is directly sent to their online VAT accounts or by post if registered offlinethrough an agent. 1.4 Information required to considered for business documentation of VAT registered businessThere is type of information is required to considers while filing registration for business.HMRC provides information related to registration of VAT. Form VAT1 for all class of members that contains applicants details provided by HMRCof (full name, home address, date of birth and National Insurance number (or Tax ID ifthe applicant is a foreign national). If assesses provide tax ID that it requires to submitanother three documents as 1 copy of government identification like driving licence andnational identity and 2 copies of correspondence that contains the mane and address, bankstatement is an alternative document in option.Form VAT2 it is required maintain if business is a partnership formForm VAT50 and VAT51 if bForm VAT5L Applies if the business activities involve land and property 2
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