(solved) Concept of VAT - Doc

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Indirect Tax
Table of ContentsINTRODUCTION..........................................................................................................................1TASK 1............................................................................................................................................11.1 Sources of information on VAT............................................................................................11.2 Organisation should interact with the relevant government agency.....................................11.3 VAT registration requirements.............................................................................................21.4 Information that must be included on business documentation of VAT registeredbusinesses....................................................................................................................................21.5 Requirements and the frequency of reporting VAT schemes...............................................31.6 Maintain an up-to-date knowledge of changes to codes of practice, regulation orlegislation....................................................................................................................................4TASK 2............................................................................................................................................42.1 Extract relevant data for a specific period from the accounting system...............................42.2 Inputs and outputs using these VAT....................................................................................52.3 Calculation of VAT due to, or from, the relevant tax authority............................................72.4 Complete and submit a VAT return and any associated payment within the statutory timelimits............................................................................................................................................7TASK 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.........................................................................................................................................8TASK 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 for changes in VAT legislation which would have an effect on an organisation’srecording system.......................................................................................................................10CONCLUSION.............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONThe indirect taxes are introduce as the levies made by state and central government on theservices, consumption, expenditure, privileges and rights yet not on the income or property(Adema, Fron and Ladaique, 2014). For this report, chosen organisation is Aviva InternationalInsurance Limited which is a financial service industry and headquartered in London , UK. Itwas established in 2000 by Sir Adrian Montague. This report divided into different parts whichincludes concept of VAT regulations, and completion of VAT returns in timely and accuratemanner. Along with this, concept of VAT penalties and information related to this also coveredin this report.TASK 11.1 Sources of information on VATIn the UK, the Value-added tax (VAT) is introduce as the third-largest source ofgovernment revenue and it was introduced in 1973. VAT is administered and gathered by HMrevenue and customs, firstly via the value added tax act 1994. It is levied on services provided bythe Aviva International Insurance Limited and imported from outside the EU. In addition, it iscollected and assessed on the value of services or goods that have been given every time there isa transaction (Albayrak, 2017). In different countries, VAT are identify as a key revenue sourcesas high rate of unemployment and low per capital income give other income sources inadequate.One of the main source of information on VAT is HMRC pages of the UnitedGovernment websites like www.gov.uk. This authority cover entire taxes, where advice, notes,publications and guidance are present to download. HMRC pages are mainly expect taxpayers toidentify the answers to any questions or queries on their own website (Bargain and et. al., 2015).Yet, there is web chat facility and telephone enquiry line that can easily deal with unansweredissues. Taxpayers can also apply an online enquiry form and also write to HMRC pages by postfor guidance.1.2 Organisation should interact with the relevant government agencyCompany should apply different rules and regulations for running their businessoperations and activities in specific nation successfully. Government agency related to the value-added tax is HMRC that play vital role in dealing with different number of taxes such as servicetax, VAT etc. Therefore all these taxes are essential and beneficial for the company to should1
follow this and achieve better outcomes within predetermined period of time (Capéau, Decosterand Phillips, 2014). HMRC is a government agency that direct interact with the company indescribing different number of indirect taxes including custom tax, VAT, services tax and manyother relevant tax. All these are identify as a main expenditure which should pay by company inmore. Therefore, in this different department of such type of government agency recruitknowledge and experienced person who can easily solve such type of issue and help them inaccomplishing long term goals and objectives.1.3 VAT registration requirementsVAT registration is mandatory for any enterprise if they register in this the income earnedin any consecutive 12 month period of time exceeded (Duclos, Makdissi and Araar, 2014). Thereare different major requirements and documents for VAT registration which should followed byeach and every organisation. Some requirement are determined as under:Incorporation certificate of companyMoA and AoA is requireParticulars of employees involved in the organisationAddress Proof of business owner or directorCompany PAN card or Individual PAN card in case of proprietorshipID Proof of business director including different documents such as Passport, Drivinglicenses, Election card, Pan Card etc.Lease, rental or proprietorship agreement of companyIf business are owned by two and more partners, company should require partnershipdeed.Passport size photograph is also require by the director of company.Therefore, above mentioned all these are identify main requirement for an organisation toregister for VAT. It is important and beneficial for the company to charge VAT on services andgoods sold to clients (Dustmann and Frattini, 2014). They also recover Value-added tax chargedon services and goods buy for the businesses from suppliers, other business etc.1.4 Information that must be included on business documentation of VAT registered businessesValue-added tax is followed to both services and goods in specific nations and is coveredin the final price of product and service. It is charged at the rate of 12.5%. Along with this, VATregistered business must gather value-added tax from clients, submit such type of tax return and2
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