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Indirect Tax Laws : Assignment

   

Added on  2021-01-08

15 Pages3527 Words42 Views
INDIRECT TAX

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1 ..........................................................................................................................................31.1 Source of information on VAT..............................................................................................31.2 How organisation interact with government agency.............................................................31.3 Requirements of VAT registration.........................................................................................41.4 Information that must be included on business documentation of VAT registered business51.5 VAT schemes required for reporting purposes......................................................................51.6 Be aware about relevant changes of legislation and codes of practices................................6TASK 2............................................................................................................................................72.1 Extraction of Data from the accounting system.....................................................................72.2 Calculation of input and output for various VAT classifications sated payment understatutory time limits.....................................................................................................................82.3 Calculating VAT due to/from the relevant tax authority.......................................................82.4 VAT return and any associated payment within the statutory time limit..............................9TASK 3..........................................................................................................................................103.1 Implications and Penalties for an organisation resulting from failure to abide by VATregulations..................................................................................................................................103.2 Adjustments and declarations for any errors or omissions identified in previous VATperiods........................................................................................................................................10TASK 4..........................................................................................................................................124.1 Informing managers of the impact that the VAT payment may have on an organisation’scash flow and financial forecasts...............................................................................................124.2 Advise for changes in VAT legislation which would have an effect on an organisation’srecording systems.......................................................................................................................12CONCLUSION..............................................................................................................................13REFERENCES .............................................................................................................................14

INTRODUCTIONIn accounting term, indirect tax is commonly known as tax levy on firm or an individualthat have to paid by the third party to the government. In general it is defined as the tax collectedby the an organisation through supply chain procedure and that is further given to legalauthorities of the nation (Bahl, 2018). There are different types of tax such as sales tax or VAT,excise duty, good and service tax etc. Indirect tax are not directly paid by the consumer to thegovernance agency but the tax burden remain on the customer as they use different services orbuy different goods. In this report, important information regarding to VAT rules, sources, registrationrequirement etc. are shown. Report also discussed significant data relevant to VAT penalties andspecific adjustment and modification. Beside this report also described VAT return of currentand previous accounting year so that crucial decision can be taken. TASK 1 1.1 Source of information on VATVAT is a kind of indirect tax that is basically imposed on the consumption of a particularproduct and services and add values throughout the entire production process from point ofmanufacture to sales. In UK this tax was introduced in 1973 and become the 3 largest source ofincome to the government that help to invest that amount for the betterment of country.Therefore it is very important to identify the different sources of information on VAT beforecharging it on companies operation business in UK. Some of the common source of informationof value added tax is registration process of Taxpayer such as tax return paper, general reportsand statements, VAT annexes, information from tax payments, acknowledgement, form taxdepartment, risk analysis administration etc. Other sources of information related to VAT is thatcompanies can directly check the portal of HMRC and collect the suitable information to pay taxand apply specific rules and regulation. 1.2 How organisation interact with government agency.It is observed that while registering for VAT individual firm and large organisation mustfollow the following procedure that have been formulated by UK government (Cnossen, 2013).There are different step in the registration process such has form filling and other relevantinformation. Thus it is assumed that companies find some problem while making themselves

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