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Indirect Tax on VAT - Assignment PDF

   

Added on  2021-01-01

14 Pages3898 Words104 Views
Indirect Tax

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Sources of VAT information.................................................................................................11.2 Manner in which organisations interact with the relevant governance agency.....................21.3 Requirements of VAT registration........................................................................................21.4 Information that must be included on business documents of VAT registered businesses. .31.5 Requirements and frequency of reporting of following VAT schemes................................31.6 Maintain an up-to-date knowledge of changes to code of practice, regulation or legislation.....................................................................................................................................................4TASK 2............................................................................................................................................52.1 Extract relevant data for a specific period from the accounting system...............................52.2 Calculation of relevant inputs and outputs using VAT classifications.................................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............................................................................................................................................8TASK 3............................................................................................................................................93.1 Implications and penalties for an organisation resulting from failure to abide by VATregulations...................................................................................................................................93.2 Adjustments and declarations for any errors or omissions identified in previous VATperiod...........................................................................................................................................9TASK 4..........................................................................................................................................104.1 Information to managers of the impact that VAT payments may have on an organisation'scash flow and financial forecasts..............................................................................................104.2 Advise to revenant people of changes in VAT legislation which would have an effect onan organisation's recording system............................................................................................10CONCLUSION..............................................................................................................................11

.......................................................................................................................................................11REFERENCES..............................................................................................................................12

INTRODUCTIONIndirect taxes are applied on the manufacture or sale of goods and services. These areinitially paid to the government by an intermediary, who then adds the amount of indirect tax inthe value of goods and burden of tax is passed to the end user. An indirect tax is collected by theone entity and paid to the government and incidence of tax is on the ultimate consumer. Indirecttax is collected in form of sales tax, Value Added Tax and Goods and Service tax. Price of theproduct got increased by imposing indirect tax. In United Kingdom Value Added Tax (VAT)was introduced in the year 1973 and it is third largest source of revenue for the government(Albayrak, 2017). It is administrated and collected by HM Revenue and Costumes through theValue Added Tax Act 1994. In this project to understand VAT regulations full information ismentioned. Information regarding complete VAT returns accurately and in a timely manner isprovided. VAT penalties and adjustments for previous year and communication of VATinformation is discussed. TASK 11.1 Sources of VAT informationApplication of VAT is on manufacture or sales of goods and services. Tax is consideredas one of the most important source of revenue for government of the country. Tax system in acountry is segregated in two sectors and for collection of tax such as VAT information isrequired by the government. Information to impose tax is collected from books that aremaintained by businesses to record their financial information. Sales and purchase book in anorganisation defines about the quantity that is purchase and sole during the year. Thisinformation is important to be collected by the government to decided the amount of VAT to beimposed on the business entities. Together with this details regarding a manufacture is collectedfrom the books that provide information regarding quantity manufactured by the company. Salesreturn books and purchase return books also includes information that is important for VATcalculations (Arunatilake, Inchauste and Lustig, 2017). Debit and credit not reduces the amountof tax needs to be paid to the government. So all the documents that are specified are consideredas primary source of information for VAT.1

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