Sources of Indirect Tax Assignment
Added on 2020-10-23
14 Pages3798 Words468 Views
Political Science
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Indirect Tax
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Sources of information on VAT............................................................................................11.2 Organisation should interact with the relevant government agency......................................11.3 VAT registration requirement................................................................................................21.4 Information that must be included on business documentation of VAT...............................3registered businesses...................................................................................................................31.5 Requirements and the frequency of reporting for these VAT schemes.................................31.6 Knowledge of changes to codes of practice, regulation or....................................................4legislation....................................................................................................................................4TASK 2............................................................................................................................................62.1 Relevant data for a specific period from the accounting system...........................................62.2 Relevant inputs and outputs using these VAT classifications...............................................62.3 VAT due to, or from, the relevant tax authority....................................................................72.4 VAT return and any associated payment within the statutory time.......................................8limit.............................................................................................................................................8TASK 3............................................................................................................................................93.1 Implications and penalties for an organisation resulting from failure to abide.....................9by VAT regulations.....................................................................................................................93.2 Adjustments and declarations for any errors or omissions identified..................................10TASK 4..........................................................................................................................................104.1 Impact that the VAT payment may have on an organisation’s............................................10cash flow and financial forecasts..............................................................................................104.2 Advise to relevant people of changes in VAT legislation...................................................11CONCLUSION..............................................................................................................................11REFERENCES .............................................................................................................................12
INTRODUCTIONIndirect taxes are defined as the tax imposed on an individual or on an organisation that isfinally paid for by some other person. In accounting term, tax is said to be a mandatory financialaccusation that have been imposed on a tax payer by the government that further used to funddifferent public expending (Bahl, R., 2018). In general, if tax have impact on one individual andincidence on the other that kind of taxes are knows as indirect tax. Indirect tax is mainly imposedon almost each goods and services and allows the tax burden to shift. In this report, sources of information on VAT, registration requirement anddocumentation for VAT, frequency of reporting for value added tax schemes, calculation forrelevant input and output for VAT classification and return and any associated payment withinthe statutory timelimits are discussed. Report also shows, implication and penalties for an organisation fromfailure to abide by VAT regulation, adjustments and declaration for specific period and advise torelevant people of changes in VAT legislation. TASK 11.1 Sources of information on VATA VAT value added tax is defines as a consumption tax which is added to the sales priceof a commodity. It basically represent the value added to a good throughout its manufactureprocess. In UK the VAT was introduced in 1973 and is consider to be third largest source ofrevenue to the government after income. There are different types of sources of information onVAT that should be known by the administration of company which further support them toexactly know about the procedure of tax implementation and manner how government collectVAT. 1.2 Organisation should interact with the relevant government agency.In present era, it is very significant that an organisation operating business in a countrylike UK must have full information about laws and procedure and follow certain rules andstandard imposed by government while operating business. In UK government have foundedHMRC known as Her Majesty's revenue and customs that is a non-ministerial department whichis responsible to collect tax (Cnossen, 2013). It also support companies or taxpayers to payimposed tax and in case have any issue must ask to HMRC to resolve the problems occur at the
time of payment of tax. There are different manner that help individual firms or otherorganisation which support them to interact with government institution. Organisation cancommunicate with UK government agency by different ministerial department that are formedby HMRC. These department assist firms and companies to acquire the detail knowledge aboutthe current tax rate, changes in VAT rate and able to pay the outstanding debt. Sometime it isalso assumed that if an organisation is facing any problems related to imposed tax rate or havingissue in calculation then they directly visit to the government site in order to know about therules and standard related to tax rate that are fixed by government on particular goods. Similarly there is another way of interacting with government agency as in case ifcompany are facing problem related to tax then they could write letter to department or canEmail to get the specific information for certain tax paying situation. To ease the process ofinteraction UK government have started sending link for general enquire related to tax rate orany other relevant information. 1.3 VAT registration requirementIt is observed that for registering for Value added tax an organisation have to apply toHMRC. There are certain requirement for registration on VAT for both existing and newbusinesses that are discussed below:Existing business:Companies that are already existing in market and wants to register for VAT must giveevidence of timely payments of income Tax for the last fiscal year (Cnossen, 2013). Restorationwill postulate all liabilities on the older account to be accomplished and the older credentials tobe submitted to the government authority. There are some other requirement such asLatest financial statements and projected cash flow for last accounting year.Hard copy of papers of registration of the company.Tax clearance certificate and Current bank statements showing transaction for at lest 3 months. New businesses:For the companies setting their new business have some requirement on VAT registrationsuch as company would have to put forward a provisional financial gain tax return paper andmust give the basic one-fourth payment that where relevant before enrolment. Some otherrequirement are:
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