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sources of information on VAT

   

Added on  2020-12-24

14 Pages4255 Words291 Views
Political Science
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Indirect tax
sources of information on VAT_1

Table of ContentsINTRODUCTION...........................................................................................................................4TASK 1............................................................................................................................................41.1 Identification of sources of information on VAT..................................................................41.2 How an organisation should interact with the relevant government agency.........................41.3 VAT registration requirements..............................................................................................51.4 The information that must be included on business documentation of VAT.......................6registered businesses....................................................................................................................61.5 The requirements and the frequency of reporting for VAT schemes...................................71.6 Maintain an up-to-date knowledge of changes to codes of practice, regulation or legislation......................................................................................................................................................8TASK 2............................................................................................................................................82.1 Extraction of relevant data for a specific period from accounting records............................82.2 Relevant inputs and outputs using these VAT classifications...............................................92.3 VAT due to, or from, the relevant tax authority..................................................................112.4 VAT return and any associated payment within the statutory time limits..........................11TASK 3..........................................................................................................................................123.1 The implications and penalties for an organisation resulting from failure to abide by VATregulations..................................................................................................................................123.2 Adjustments and declarations for any errors or omissions identified in previous VATperiods........................................................................................................................................13TASK 4..........................................................................................................................................134.1 Inform managers of the impact that the VAT payment may have on an organisation’s cashflow and financial forecasts.......................................................................................................134.2 Relevant people of changes in VAT legislation which would have an effect on anorganisation’s recording systems...............................................................................................13CONCLUSION..............................................................................................................................14REFRENCESS...............................................................................................................................15
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INTRODUCTIONAn indirect tax is a tax which is collected by one entity in the supply chain process andpaid to the government of the country, but it is passed to the customer as part of the purchaseprice of a product or service. The customer is ultimately pays the tax by spending more for thegoods and service (Emran and Stiglitz, 2005). Value added tax, service tax, goods and servicetax etc. are some of the examples of the indirect taxes. Value added tax (VAT) was introduced in1973 and it is now third largest source of revenue for the government after income tax andnational insurance. The given project is divided into four tasks. First task involves informationregarding VAT sources, registration requirements etc. Second task includes informationregarding VAT returns, third task involves VAT penalties and adjustments for earlier errors andthe last task contains the details regarding communication of VAT informations. Paper basesources are also introduced in a wide number of range for help to taxpayers. These publishedpapers can be requested to sent by contacting at HMRC website. TASK 11.1 Identification of sources of information on VATVAT is levied on most of the goods which are provided by registered entity in the UKand some of the goods and services which are imported from outside the European Union. Forlevying the VAT and other legal requirements, it is very important to identify the various sourcesof information on VAT. The major sources of information on VAT are HMRC websitewww.hmrc.gov.uk, where all the information on VAT is available. At this website advice notes,magazines, publication and guidance are available. Usually taxpayers find information on thiswebsite but there are a telephone helpline also available for instant advice and guidance.Taxpayers also can acquire informations by email and write on the website. The Govt. also set upas distinct website in addition to HMRC which is www.businesslink.gov.uk. (Boadway,Marchand and Pestieau, 1946). there is a very helpful section for taxpayers on VAT. Mainly itcan be say that Govt. of UK is a major source of information on VAT because most of sourcesare provided by Govt. to taxpayers.
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1.2 How an organisation should interact with the relevant government agencyThe VAT administration is deal by the HMRC department. Various VAT offices dealwith the VAT matters as specified by relevant department. The central office at Southendconcerns with the general VAT matters. It includes issuing guidelines specific type of supply.The local officers are appointed to deal with local administration. It provide guideline toregistered business whose principle place of transactions are situated in this respective area. Theregional collectors control whole the process. For checking whether the appropriate rules arefollowed by registered persons or not, staff of HMRC will visit timely the registered entities. Ifany business person don't agree with the applicable VAT rules then he can ask his local officer inlocal authority. It is not compulsory every time to appeal formally (Virmani, 1989.). Where itsettled by an agreement, written statement is issued by normal appeal process. The time limit forevery process is fixed under the department sections. 1.3 VAT registration requirementsA trader may be registered under VAT system may be voluntary or compulsory. Abusiness must register for VAT with HM Revenue and Customs ( HMRC ) if its VAT taxableturnover is more than £85,000 per financial year. And the business is require to inform theHMRC department within 30 days from end of month in which he become liable to VATpayment. If the department of revenue and custom satisfy that the supply of goods not exceedsfrom British pound 81000, registration will not be required under VAT system. And if theregistration is not done at appropriate time then vat is payable from the preceding date fromwhich he is liable to pay VAT or registration. Organization/person would also need to registerfor VAT if receive products that are bought and sold in the UK from the EU worth more thanBritish pounds 83,000 or expect to go over the dividing line/point where something begins orchanges in a single 30 day period (Hatzipanayotou, Michael and Miller, 1994). A separatedefinition is stated by the HMRC department, if any business entity doesn't meet that definitionthen it can't be registered under VAT scheme. Business entities which are engaged in thebusiness of goods and services those exempted from tax also exempted from VAT registration.There are always need of supporting evidence such as invoices, bank statement etc. forregistration under VAT. The registration under VAT may be voluntary or compulsory as per therules of department. Following documents/information are needed to register for VAT: National Insurance (NI) number.
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