Indirect Tax on VAT : Assignment PDF

INDIRECT
TAX

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................2
1.1 Identifying sources of information on VAT..........................................................................2
1.2 Examining the manner according to which the organisation should interact with the
Government agency.....................................................................................................................2
1.3 Examining the VAT registration requirements......................................................................2
1.4 Identifying the information that must be included on business documentation of VAT.......2
1.5 Examining the requirements and the frequency of reporting for these VAT........................2
1.6 Maintaining an updated knowledge regarding the changes of codes of practices, regulation
or Legislation...............................................................................................................................2
TASK 2............................................................................................................................................2
2.1 Extracting relevant data for a specific period from the accounting system...........................2
2.2 Calculation regarding relevant inputs and outputs using these VAT classifications.............2
2.3Calculation regarding the VAT due to, or from, the relevant tax authority............................2
2.4 completion and submission a VAT return and any associated payment within the statutory
time
......................................................................................................................................................2
TASK 3............................................................................................................................................2
3.1 Explaining the implications and penalties for an organisation resulting from failure to
abide
......................................................................................................................................................2
by VAT regulations......................................................................................................................2
3.2 Preparing adjustments and declarations for the errors or ommissions identified in previous
VAT periods ................................................................................................................................2
TASK 4 ...........................................................................................................................................2
4.1 Informing the managers regarding the impacts that the VAT payment may have over the
organisation's cash flow and financial forecasts .........................................................................2

4.2 Advising regarding the relevant people of changes in VAT legislation which would have
an effect on over the organisation's recording systems................................................................2
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
The indirect tax refers to the tax amount which is mainly collected by the business
organisation in the supply chain(mainly the producers or retailers) and paid to the governmental
tax authorities. But it is actually charged from the consumers as part of the purchase cost of a
good or service. The total amount of tax is divided according to the quantity of the commodity
and the consumer borne the amount of tax imposed on goods and services. Furthermore, the
indirect tax refers to the kind of the tax where the tax amount and it's impact doesn't borne by the
entities(Bahl, 2018). The burden of such tax can be easily shifted from taxpayer to somebody
else. This affects and increase the prices of the goods and services.
The report pertain the knowledge regarding the meaning, source and examples of indirect
tax, Complete VAT returns accurately and in a timely manner, Understanding VAT penalties and
making adjustments for the previous errors and communicating VAT information.
TASK 1
1.1 Identifying sources of information on VAT
Value Added Tax or VAT refers to the ingestion tax which is currently applied on
purchase of goods and services with its value added on all phase of manufacture from production
to the point of sale. The tax of VAT basically paid by a taxable individual is evaluated by
deducting values of all inputs utilize for producing the goods and services from cost of
production. furthermore, VAT is not chargeable in all cities, some cities are free from payments
of VAT tax.
Essential content regarding this is promptly accessible from federal government sites.
Besides this, other relevant source of information is acquirable from HM revenue and customs
(HMRC) portals that is accountable for collecting tax across the entire UK(Cnossen, 2013). All
further relevant information in respect of tax or about any tax related issues is considered by the
HMRC and it renders the solutions for payment of tax by its payers.
1.2 Examining the manner according to which the organisation should interact with the
Government agency
At the time of VAT registration organisations have to follow the important procedures.
These procedures include registration form which is filled by organisation and with the relevant
1