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Also could you please confirm if my understanding related to this table is correct
Goods Services
Export B2B/B2C B2B – no output VAT
Output VAT cannot be charged B2C – Output VAT Charged
Input VAT related to the export can be claimed Input can be claimedImport Output VAT charged Output VAT charged
Input VAT claimed (Reverse Charge) Input VAT claimed (Reverse Charge)This isn’t a table so I don’t quite understand what you’re trying to say.
Goods – exports = zero rated
Goods – imports = PVAServices:
UK business to overseas non-business customer (B2C) = UK VAT charged as normal
UK business to overseas business customer (B2B) = zero rated
Overseas business to UK business = reverse chargeOutside the scope means that they do not feature in the VAT system at all.
For example, If a person is VAT registered because they run a business and they are also employed part-time, they would not charge VAT on their wages as wages/employment income is outside the scope of VAT. The same goes for dividends – that person would receive dividends (a form of income) but dividends are outside the scope of VAT.
VAT is charged on the taxable supply of goods and services IN THE UK by a taxable person IN THE COURSE OF THEIR BUSINESS.
IN THE UK = VAT can be quite complicated but this is why overseas transactions have special rules. Generally exports are treated as zero rated and so there is no output VAT charged but input VAT can be reclaimed. The exception to this is where services are supplied by a UK business to an overseas non-business customer (e.g. a member of the public) where UK VAT would be charged as normal. For imports, for goods postponed VAT accounting (PVA) applies and for services the reverse charge applies. For both PVA and the reverse charge, the UK business importing the goods/incurring the service from an overseas supplier is effectively treated as selling those goods/supplying those services to itself and must account for both output VAT and input VAT. This is generally just an admin issue.
IN THE COURSE OF THEIR BUSINESS = goods you sell as part of a hobby are not in the course of business.
Donations to charity (up to certain limits) are not treated as supplies for VAT but the input VAT can be reclaimed. This is to encourage businesses to donate surplus stock etc to charitable causes.
Transfer of a going concern (TOGC) is outside the scope of VAT which means that no output VAT is charged by the seller and no input VAT can be reclaimed by the buyer.
Where a VAT group is in operation, the group is treated as a single entity for VAT (i.e. as if it were one business), therefore there is no VAT on intragroup supplies.
Try the ACCA website, but beware as the past papers are not updated for the current Finance Act:
https://www.accaglobal.com/uk/en.html
It is recommended that you buy an up to date revision kit where everything is updated.
Furnished Holiday Lettings (FHLs) have been removed from the syllabus, so ignore any reference to them in the property income section and as relevant earnings for pensions.
Changes to the rates of NIC including the employment allowance.
Changes to the rates of CGT (including BADR and Investors’ relief) and there is no longer a distinction between the treatment of residential property and other gains.
Changes to the VAT penalty for late payment.
So use the FA2024 materials at your peril! Bear in mind the changes to the rates above.
The notes have been updated and will be available shortly.
The lectures will follow in a few weeks.
The line: ‘In February 2021, both Anna and Alex made lifetime gifts to their children that fully utilised their respective inheritance tax nil rate bands of £325,000’ is just telling you that there’s no NRB available on the death estate.
You cannot (and are not expected to) calculate the value of the gifts as you are not given the amounts of the gifts, just that they used up the NRB.
Practise makes perfect!
Let the mark allocation be your guide as to how much to write, make sure you address the main points using key words and any figures given in the question.
Cash basis – treated as a sale at cost price to the trader, so if no adjustment has been made, add in the cost price.
Accruals basis – treated as a sale at selling price to the trader, so if no adjustment has been made, add in the selling price. If an adjustment has been made at cost price, add in the profit.
There is no maximum amount on how much can be put into a pension scheme, but there is a maximum amount on which tax relief is given.
From the information that you’ve provided, the maximum amount on which tax relief can be given in 2024/25 is the £44,000 that you’ve calculated.
You can increase the basic rate band, but if they’re already a basic rate income tax payer then it won’t make any difference to the calculation of the INCOME TAX as their level of taxable income is already within the basic rate band.
The only time that extending the basic rate band for a basic rate income tax payer would be if they also had taxable gains.
£(24,600 + 12,300 – 20,500) = £16,400
£24,600 represents the cost for 6 months, so £4,100 per month.
The cost for a four month period therefore would be £4,100 x 4 = £16,400 which is correct.
If interests is paid six monthly, the amount accrued at 1/12/23 = 5 months, so £20,500.
The amount accrued at 31/3/24 = £3 months, so £12,300.
The amount paid during the four month period was £24,600, so the amount on the accruals basis is
£24,600 less the amount relating to y/e 30 /11/23 of £20,500 + the amount owed at 31/3/24 but not yet paid £12,300 = £16,400
Your explanation is confusing!
When the goods are brought into the UK, the UK importer is deemed to buy them from itself, and so charges both output and input VAT on the same VAT return so the net VAT effect of the import on the trader is NIL.
When the goods are sold on to a customer, output VAT is charged as normal.
The question gives you the gain on one asset (£17,400) and the loss on the other asset (£10,100), so the net chargeable gain for the tax year (current year gains less current year losses) is £7,300.
You are simply misunderstanding the terminology.
Imports of goods to UK businesses are accounted for using ‘postponed VAT accounting’ (PVA).
Services supplied from overseas to UK businesses are accounted for using the ‘reverse charge’ method.
The treatment of both is exactly the same. The VAT rate in the overseas country is irrelevant.
The UK business is deemed to supply the goods/services to itself and therefore accounts for both output and input VAT (at the rate applicable in the UK) on the transaction.
As long as the business is making wholly taxable supplies, then the input VAT is recoverable and therefore cancels out the output VAT making the net effect £0 TO THE BUSINESS.
When the goods are sold on, then VAT is charged as normal.
Correct. Read the question as sometimes you’re given total miles and sometimes (as in this question) you’re given the business miles (and you can only claim for the business miles).
I think I’ve already answered this one in a previous post!
Flat rate expenses:
For business miles = No deduction for actual cost, but a DEDUCTION at fixed rates instead
For use of business premises partly for private purposes = Initially claim all costs, the ADD in flat rate amount depending on number of occupants (the figure will be given to you in the exam). Ignore any actual private use % given.
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim75015
1. Why is the cost Food, utilities, etc. £25,000, instead of £16,250 (£25,000*65%), when the private use percenttage is 35%?
Because the business is claiming flat rate expenses. When business premises are partly used as a home (like a B&B), all expenses are claimed and then a flat rate ADDITION is added in to reflect the private use element of the expenses, which is given in the question as £7,800.
So claim the full £25,000 initially, then add in £7,800, giving a net allowable expense of £17,200.
2. Why the running cost of the car £3,000 is not deducted from the revenue?
Because flat rate expenses for the car are being claimed, and this replaces ALL costs of the car (with the exception of parking and toll roads).
3. Why calculating business mileage is: 10,000 miles at 45p/mile and 1,000 miles at 25p/mile, without considering the private use of 40%?
Because the BUSINESS miles are 11,000, so the total miles must be 11,000/60 x 100 = 18,333, of which 60% (11,000) are for business.
