ICAEW tax compliance VAT questions with correct answers

What is vat charged on - Answer The sale of taxable supplies by a taxable person What is a taxable person - Answer a sole trader, partnership, limited company, club or association making taxable supplies What is a taxable supply - Answer One one which output vat is chargeable and input vat can be recovered and will be zero rated, reduced rated or standard rated. When will the vat rates differ from normal - Answer Before 2011. This is particularly applicable when looking at purchases under Capital Goods Scheme. What is output vat - Answer Vat that is collected by a vat taxable person on sales and paid over to HMRC What is input vat - Answer Vat paid by a VAT taxable person on purchases which can be reclaimed from HMRC What happens every month/quarter - Answer The input and output vat is netted off and paid to or recovered from HMRC What is a multiple supply - Answer Where there are individual elements within the supply that are treated separately for vat. Some elements are exempt and some are taxable. Elements are not linked to an extent to be a single economic supply which it would be artificial to split.