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Assignment on Identification of Sources of Information on VAT
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Added on 2020-10-23
Assignment on Identification of Sources of Information on VAT
Added on 2020-10-23
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INDIRECT TAX
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 identification of sources of information on VAT..................................................................11.2 Explanation on organisation should interact with relevant government legacy....................11.3 Define the VAT legislation requirements..............................................................................21.4 Identification of information that must be included on business documentation of VATregistered business.......................................................................................................................21.5 Define the requirements for these VAT schemes..................................................................31.6 Knowledge about changes to code of practices, regulation and legislation..........................4TASK 2............................................................................................................................................42.1 Extracting the relevant data for a specific period through accounting system......................42.2 Calculating the relevant inputs and outputs as per VAT classifications...............................52.3 Measuring VAT as per relevant tax authority.......................................................................62.4 Completion of VAT return submission by associated payments within limits.....................7TASK 3............................................................................................................................................83.1 Explaining the implications and penalties in Tesco as per failure to abide VAT regulations.....................................................................................................................................................83.2 Make relevant declarations and adjustments for omissions and any errors as per previousVAT periods................................................................................................................................9TASK 4..........................................................................................................................................104.1 Inform managers the impact of VAT payment have on organization cash flows andfinancial forecast........................................................................................................................104.2 Define changes in VAT legislation that could have effect on organization recordingsystem........................................................................................................................................10CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................12
INTRODUCTIONAn Indirect tax can be defined as taxation on any individuals and entity that is ultimately paid forby the another person (Adachi, 2018 ). It is collected by an intermediary from the person whobears the ultimate economic burden of tax. The some indirect taxes can be referred as theconsumption taxes and it can be termed out as value added tax. The present report will look overthe things as sources of information about the VAT and its legal requirements and informationthat must be include on business documentation. Furthermore, calculation about the VAT returnwill be given. TASK 1 1.1 identification of sources of information on VAT.VAT is termed out as “Value added tax”. On 1st January 1973 the UK has joinedEuropean community and as a consequence purchase tax was replaced by Value Added Tax on 1April 1073. The main aim of Tax is to raise profitability to finance government spending like anyother government (THE FINANCIAL ASPECT OF VAT AND HOW IT WILL AFFECT THEBUSINESS’S CASH FLOW, 2018)). It is kind of consumption tax and in this revenue can begenerated with help of consumer spending. The seller of commodities and services will chargethis to the price. European union law requires that standard VAT rate will be at least 15% and thereduction of rate will be till 5%. In addition to it, number of EU countries has have retained theother rates for the specific product. Thus, it can be termed out as indirect Tax as it is collectedby firm on behalf of legal authorities. 1.2 Explanation on organisation should interact with relevant government legacy.To run the organization, it is very essential to abide by laws and legislation set by Hermajesty Revenue and customs. Thus, firms can assist with issues like inheritance Tax on buyingand selling of property. The UK government is committed to creating the most competitive textregimes. Thus, organisation are needed to be complied with all taxation polices set by thedepartment of HMRC in UK. In addition to this, the VAT registered business must report to theHM revenue and customers about the amount of VAT charged. It is essential for organisation toget registered itself at the time when value added tax turnover goes over£85,000 in the next 30day period. On the other hand, the firm can also get voluntary registration if the turnover isbelow £85,000 . 1
1.3 Define the VAT legislation requirements. The HMRC has recently announced the proposed changes and this all are needed to beintroduced in the finance bill 2018. Thus, VAT legislation requirement has been discussed inbelow presented manner as- The organization must registered for value Added Tax with HM Revenue and Customs(HMRC). If the taxable turnover is more than £85,000.Any kind of supply made in the UK is not exempt from VAT. Thus, taxable supplier willbe inclusive at time when they are zero rated for VAT. The VAT is charged on services that are imported from place outside the EU. The commodities and services that comes to the United Kingdom from the otherEuropean union member state, on also VAT will be charged. The standard rate of VAT is 20% on the most of good and services.The 5% VAT has been reduced from the fuel and power consume at home and bycharities, women sanity products, children car seats, residential conversions andresidential renovation and alteration. The 0% VAT will be charged on the certain good and services and this as books,newspaper, most public transport service, prescription dispensed to patient by a registeredpharmacist. The Rate of VAT will not be charged on the exempt supplied. They are those who do notmeet the definition of taxable supplies. These as are- insurance, betting, gambling,lotteries, providing credit and certain education and training. 1.4 Identification of information that must be included on business documentation of VATregistered business. INFORMATION TO BE DISCLOSED ON COMPANY DOCUMENT This is legal requirement to disclose some extent of information on company documents. Theseas are letterheads, compliment slips, invoices, purchase orders, website and email message areall considered to be company documents (Song and 2018). These as are- letterheads- Name of the company. Name of company- It must be end with Ltd or world limited. (In case if the name of tradeunder is differ from firm name then it is necessary to show certificate of incorporation).The entity registered office address. 2
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