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INDIRECT TAX INTRODUCTION 1 TASK 11

   

Added on  2020-10-05

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INDIRECT TAX
INDIRECT TAX INTRODUCTION 1 TASK 11_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Identify sources of information on VAT..........................................................................11.2 Explain how an organisation should interact with the relevant government agency.......11.3 Explain VAT registration requirements...........................................................................21.4 Identify the information that must be included on business documentation of VATregistered businesses..............................................................................................................31.5 Explain the requirements and the frequency of reporting for VAT schemes...................41.6 Maintain an up-to-date knowledge of changes to codes of practice, regulation orlegislation...............................................................................................................................4TASK 2............................................................................................................................................52.1 Extract relevant data for a specific period from the accounting system...........................52.2 Calculate relevant inputs and outputs using VAT classifications...................................52.3 Calculate the VAT due to, or from, the relevant tax authority.........................................52.4 Complete and submit a VAT return and any associated payment within the statutory timelimits.......................................................................................................................................6TASK 3............................................................................................................................................63.1 Explain the implications and penalties for an organisation resulting from failure to abideby VAT regulations................................................................................................................63.2 Make adjustments and declarations for any errors or omissions identified in previous VATperiods....................................................................................................................................7TASK 4............................................................................................................................................94.1 Inform managers of the impact that the VAT payment may have on an organisation’s cashflow and financial forecasts....................................................................................................94.2 Advise relevant people of changes in VAT legislation which would have an effect on anorganisation’s recording systems...........................................................................................9CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11
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INTRODUCTIONIndirect tax is the tax which is gathered on the product and services which are purchasedby the people and customers. The people can later file the tax return which is forwarded togovernment including the return. This tax is collected by the individuals in supply chain and thenpaid to the government for increasing the economic revenue of the country. The people arepaying tax which ultimately leads to paying more for the purchased product. This report willidentify the sources of information on VAT along with the explanation of interacting oforganisations with the government agency along with the VAT registration requirements. Thisreport will further calculate the relevant inputs and outputs using these VAT classifications andVAT due to, or from, the relevant tax authority. In the end, VAT penalties are analysed andadjustments will be made for previous errors to communicate the VAT information to themanager.TASK 11.1 Identify sources of information on VATTaxation is an essential process which is collected by the government of a country toincrease their revenue for the country. This revenue is used for development of country in termsof improving the infrastructure and to implement various governmental schemes and policies.There are different sources of information on VAT which are available for the organisations tounderstand the implementation of tax which is gathered by the government of a country. This taxis controlled and regulated by the HM revenue and customs who is majorly governed by thevalue added tax act, 1994 (Abbott and Bogenschneider, 2018). This act was introduced on 5thJuly 1994 for collecting the tax on products and services offered by the firms. This act wasadopted by the UK government in order to collect the tax for the development of their country.is the law which has been adopted by legislation of UK. This act was approved by the queen ofthe UK by taking advices from their various cabinet ministers and politicians.1.2 Explain how an organisation should interact with the relevant government agencyAny firm who is operating in a country needs to follow the laws and regulationsimplemented by the government while operating their business operations. It is the major workfor the companies to follow these rules and laws for paying the tax and liabilities as well as tocalculate the tax of the current year. HMRC is an institution which is developed for helping the1
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people in paying their taxes and to clarify the questions associated with the tax and its collection.This institution has various departments whose responsibility is to interact with the governmentagencies (Beneke, Lustig and Oliva, 2017). The institution has 25 departments which are helpfulfor the companies to monitor and pay their debts and taxes. Also through the website of thisinstitution, firms when facing any issue in paying or calculating the tax can checks for the rulesand regulations which defines the rate of tax on a particular product or service. If such issues arenot resolved through the website, then firms can write a letter to the departments for their adviceon the issue of paying their tax. The institution has a different website for increasing theknowledge of the tax payers regarding the rules and regulations. This website is updated onregular basis or when necessary. The departments of the HMRC stays open from Monday toSaturday between the timings 8 am to 8 pm whereas on Sunday, the departments stays openfrom 9 to 5 in day time.1.3 Explain VAT registration requirementsThe process of VAT registration is not easy and compulsory until the firms reaches thethreshold amount which is provided by the government. The threshold limit for registering theVAT is 85,00 Euros in terms of Turnover of the company. Companies are eligible for the VATregistration when there turnover exceeds the threshold limit of Euros 85,000. This amount is theminimum amount which is required by the firms to register for VAT. In order to register forVAT, firms needs to apply to HMRC. This institution has developed a online portal in whichcompanies can register the VAT through online network. Also this institution has allowed agentsor accountants to register the VAT for providing the flexibility to companies in register. Thereare several steps which must be followed by the firms in order to get a certificate which is issuesafter the VAT registration (Boadway and Pestieau, 2011). There are also some problems whenapplying through online portal of the institution. Such as when any firm apply for registrationthrough the online portal then the firm needs to do the registration process by using VAT1 formand through the Post. Also similar problems can arise when a firm desires to apply for separateVAT number for registering their business division or when the firm wants to apply forAgriculture flat rate. Companies needs to file VAT1A when their business operations exists inEurope and when the companies is in distance selling, then they needs to file VAT1B for sellingtheir products of more than 85,000 Euros. When the companies are disposing their assets for2
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