Assignment on Value Added Tax

Added on - Dec 2020

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Indirect Tax
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11. 1 Source of information on VAT.............................................................................................11.2 an organisation should interact with the relevant government agency..................................11 . 4 Information that must be included on business documentation of VAT registeredbusinesses.....................................................................................................................................21 .5 VAT schemes required for reporting purposes.....................................................................21 . 6 Be aware about relevant changes of legislation and codes of practices..............................3TASK 2...........................................................................................................................................42 . 1 Extraction of Data from the accounting system...................................................................42 . 2 Calculation of input and output for various VAT classifications........................................52 . 3 Calculating VAT due to/from the relevant tax authority.....................................................82 . 4 Submission of VAT return & associated payment under statutory time limits..................8TASK 3............................................................................................................................................83.1 Implications and Penalties for an organisation resulting from failure to abide by VATregulations....................................................................................................................................83.2 Adjustments and Declarations for any errors or omissions identified in previous VATperiods..........................................................................................................................................9TASK 4.........................................................................................................................................104 . 1 Impact that the VAT payment may have on an organisation’s cash flow and financialforecasts.....................................................................................................................................104 . 2 Changes in VAT legislation which would have an effect on an organisation’s recordingsystems......................................................................................................................................11CONCLUSION.............................................................................................................................12REFERENCES..............................................................................................................................13
INTRODUCTIONSimilar to direct taxation, indirect taxation is a charge on goods and services producedand sold within a country for a given accounting period. There are many types of indirect taxespresent globally. One such type of tax is Value Added Tax (VAT). This project report aims toprovide an understanding of VAT regulations, calculations of returns, penalties and theirimplications as well as treatment of errors and adjustment made thereof. It also analyses the keychanges in VAT legislation in recent years and their impact on organizations and there cashflows, financial forecasts as well as recording systems. Input and output for VAT classificationsare also mentioned and the impact of the VAT payment on corporation's cash flow has alsodiscussed in the report.TASK 11. 1 Source of information on VATVAT is known to be the Value Added Tax that is applied on services and goods withtheir value added on each production steps initiating from manufacturing to sales. It is aconsumption tax and VAT amount is paid by taxable people which is computed by subtractingthose inputs that are utilise for goods and services production from products cost. Even so, VATis not relevant for every cities and few places are exempt from this kind of tax.Some important data can be available in the sites of federal government. Otherinformation sources can be acquirable from the portal of HMRC which is accountable forcollecting tax in all over United Kingdom. Whole applicable information about tax or anotherproblems for tax payable is related by HM revenue and cost also facilitates solution for taxpayer.1.2 an organisation should interact with the relevant government agencyWhile registering the value added tax, company has to obey some essential process.These methods considered forms of registration that is to be fill up by firm with appropriateinformation. At the time of registration methods, applicants have to tackle some problems thatare resolved through the agencies of government. There are various kinds of registration formwhich are available as per the business types. For clarifying those problems agencies ofgovernment facilitates some assistance to organisation.1. 3 VAT registration requirements1
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