63 Jacob, who is VAT-registered, opened a new shop selling electrical supplies.

He took goods valued at £230 for use in his

own house and sent out a sample worth £12 to each of 200 potential new customers.
Requirement
Which of the following statements is correct?
A Only the goods used in Jacob's house are a taxable supply.
B Only the samples sent to potential customers are a taxable supply.
C Both are taxable supplies.
D Neither are taxable supplies.
LO6a

64 Which two of the following statements are correct in relation to VAT invoices?
A A VAT invoice must be issued to all taxable and non-taxable customers.
B A VAT invoice must contain certain details including the VAT registration number, the total VAT chargeable and a
description of the goods supplied.
C A simplified invoice maybe issued if the VAT-inclusive sale proceeds are less than £500.
D The VAT invoice is the usual record used to supporta recovery of input VAT.
LO 1d
1 2 Value added tax - further aspects

1 Lavender Ltd has prepared its VAT return for the quarter ended 31 March 2024.
By what date should Lavender Ltd submit its VAT return for the quarter e n d e d 31 March 2024?
A 31 March 2024
B 30 April 2024
C 7 May 2024
By what date should Lavender Ltd pay its VAT relating to the quarter ended 31 March 2024?
D 31 March 2024
E 30 April 2024
F 7 May 2024
LO2d

2 Cornflower pic had an annual VAT liability in 2023 of £3,000,000. Its VAT liability for the quarter ended 31 March 2024 is
£900,000.

Requirement
Which of the following options correctly identifies Cornflower pic's required VAT payments for the quarter e n d e d 31
March 2024?
A A single payment of £900,000
B Three se pa rate pa yme n ts of £300, 000 ea ch
C Two payments of £250,000 each and a balancing payment of £400,000
D Two payments of £1 25,000 each and a balancing payment of £650,000
LO6f

3 What is the maxim u m invoice value if a trader wishes to issue a si mplified VAT i nvoice?
A £50
B £100
C £250
D £1,000
LO1d

4 Dilara has a business with a year ended 31 December 2023. Dilara uses the annual accounting scheme.

Requirement
Which of the following statements is correct?
A She pays all of herVAT in one payment and submits her return by 7 February 2024.
B She pays all of herVAT in one payment and submits her return by 29 February 2024.
C She pays herVAT in nine monthly installments starting in April 2023 with a balancing payment and the return
submitted by 7 February 2024.
D She pays herVAT in nine monthly installments starting in April 2023 with a balancing payment and the return
submitted by 2 9 February 2024.
LO6f
5 Duffey operates the annual accounting scheme for his VAT payments. He opted to make nine monthly payments during
the year. His total VAT liability in the year ended 31 March 2023 was £20,000 and in the year ended 31 March 2024 is
£22,500.
Requirement
What is the final balancing payment of his VAT for the year ended 31 March 2024 and when is it due?
A £2,500 by 7 May 2024
B £2,500 by 31 May 2024
C £4,500 by 7 May 2024
D £4,500 by 31 May 2024
LO6f

6 Michael is registered for VAT. He issues full invoices for goods sold for more than £250, and simplified invoices for goods
sold for less than £250.
Requirement
In relation to which of these invoices, if either, is Michael required to retain copies?
A Neither
B Detailed invoices only
C Simplified invoices only
D Both
LO 1d

7 What is the maximum permitted annual taxable turnover for a trader to join the annual accounting scheme?
A £100,000
B £1,350,000
C £1,600,000
D £150,000
LO6f

8 Which of the following statements about the VAT payments on account scheme for substantial traders is true?
A Under the payments on account scheme VAT is paid in quarterly instalments.
B Under the payments on account scheme VAT is paid in instalments every other month (ie, six payments per annum).
C Each payment on account is 1/24 of the total VAT liability of the previous year.
D The balancing amount for the year, if any, is payable two months after the year end.
LO6f

9 Which two of the following statements about VAT are true?

A Businesses with taxable turnover greater than £2.3 million must join the VAT payments on account scheme.
B Businesses operating the flat rate scheme apply their sector percentage to total (both taxable and exempt) VAT-
inclusive turnover.
C HMRC may grant exemption from registration to zero-rated traders that have negligible amounts of input VAT.
D Businesses operating the annual accounting scheme must still file VAT returns every quarter.
E Businesses operating the cash accounting scheme cannot also join the annual accounting scheme.
LO6f
1 0 Which two of the following statements concerning cash accounting are true?
A VAT is accounted for o n the basis of cash paid and received rather than o n invoices.
B Bad debt relief is available six months from the date the d e b t was due to b e received.
C The scheme is advantageous for businesses making only zero-rated supplies.
D The scheme is advantageous for businesses offering extended credit to customers.
E Businesses in the scheme must leave if taxable supplies i n the previous 12 months exceed £1.35 million.
LO6f

11 Major pic had a VAT liability of £3 million in its year ended 31 October 2023. The VAT liability for the quarter to 30 April
2024 is £800,000.
Requirement
Assuming the correct payments o n account have been made, how much is d u e b y 31 May 2024?
A £800,000
B £550,000
C £300,000
D £125,000
LO 6f

12 Which of the following is a feature of the annual accounting scheme?

A VAT must be paid in quarterly o r monthly installments.
B Automatic bad d e b t relief is given.
C The VAT return is due two months and seven days after the e n d of the year.
D You cannot join the annual accounting scheme if you have previously left the scheme.
LO6f

13 Which of the following is a feature of the flat rate scheme?

A Businesses calculate VAT due as a flat rate percentage of their VAT exclusive turnover.
B A limited cost trader may not join the flat rate scheme.
C Businesses issue normal tax invoices to customers.
D In the first year a trader must use 1 6.5% as the flat rate.
LO6f

1 4 Giovanna makes standard-rated supplies. She voluntarily registered for VAT from her first day of trading a n d
simultaneously joined the flat rate scheme. The flat rate percentage she must use is 1 1%.
She has now been trading for two years. For her latest trading quarter Giovanna had total turnover of £8,500 (exclusive of
VAT}. Giovanna's total purchases were £2,400 (exclusive of VAT).
Requirement
How much VAT is payable to HMRC for Giovanna's latest trading quarter?
A £671
B £805
C £935
D £1,122
LO6f
15 Gordon, a VAT-registered trader who is a member of the cash accounting scheme, supplies some goods to a customer.
The order is received from the customer o n 5 May a n d the goods are despatched o n 1 3 May. An invoice is issued o n 16
May a n d payment is received from the customer o n 4 June.

Requirement
What is the tax point of the supply?
A 5 May
B 13 May
C 16 May
D 4 June
LO 6d, 6f

16 Tony has been VAT-registered for many years, making only standard-rated supplies. He is a member of the flat rate
scheme for VAT The flat rate percentage based o n his trade sector is 8%.
In the quarter e n d e d 31 March 2024 Tony made sales of £17,000 (exclusive of VAT). This figure includes £2,500 in respect
of the sale of a computer that had been used in Tony's business.

Requirement
How much VAT is payable to HMRCforthe quarter e n d e d 31 March 2024?
A £1,160
B £1,360
C £1,392
D £1,632
LO 6f

17 Which two statements about the flat rate scheme are correct?
A A trader can join if they expect total net turnover for the next 1 2 months not to exceed £230,000.
B A trader using the flat rate scheme may also b e authorised to use the annual accounting scheme.
C T h e f l a t r a t e i s a p p l i e d t o t h e VAT-excIu sive tu rn ove r.
D Where a customer requires a n invoice, a flat rate trader who makes wholly stand a rd -rated supplies will issue a VAT
invoice showing 20% output tax.
LO 6f

18 Which two statements about the cash accounting scheme for VAT are correct?
A A VAT return is completed once a year.
B Automatic bad d e b t relief is given.
C Output VAT is accounted for when cash is received from the customer.
D Output VAT is calculated by applying a flat rate percentage to the VAT-inclusive turnover.
E VAT is paid over to HMRC each month by direct debit.
LO 6f

19 How does a li mited cost trade r usi n g the flat rate scheme calcu late VAT due?
A 20% of VAT-inclusive turnover.
B 16.5% of VAT-inclusive turnover.
C 20% of VAT-exclusive turnover.
D 1 6.5% of VAT-exclusive turnover.
LO 6f
20 A trader may join the annual accounting scheme where the taxable turnover i n the following year is not expected to
exceed:

LO 6f

21 Florence Ltd is a VAT-registered business which operates the cash accounting scheme. During the quarter ended 31
December 2023 it made the following purchases:

Goods received Date paid Input VAT suffered

£
Artwork for reception 3 0 November 2023 15 December 2023 1,150

Spare machinery parts 1 December 2023 13 January 2024 242

Marketing literature 1 September 2023 1 October 202 3 858

Requirement
How much input tax can Florence Ltd recover o n these items in the VAT return for the quarter ended 31 December 2023?
A £1,150
B £1,392
C £2,008
D £2,250
LO6f
13 Administration of tax

1 Camilla began trading in January 2023. Camilla's profit for the year e n d e d 31 December 2023 was £56,000. She has not
informed HMRC that she has begun to trade and has never been issued with o r completed a self-assessment return.

Requirement
What is the latest date by which Camilla should have contacted HMRC to obtain a self-assessment return?
A 5 October 2023
B 31 October 2023
C 31 January 2024
D 5 October 2024
LO 2c

2 Anne received her self-assessment return relating to the year 2023/24 on 1 5 December 2024.
Requirement
What is the latest date by which Anne should submit her return online?
A 31 December 2024
B 31 January 2025
C 15 March 2025
D 31 March 2025
LO2d

3 Andrew is an employee (not a director) of Toes Ltd with an annual salary of £50,000 and bank interest of approximately
£1,500 per year.

Requirements
What type of self-assessment return is Andrew required to file each year?
A Andrew may file a short tax return.
B Andrew must file a full tax return.
Assuming Andrew were to leave his employment to set u p in business with a turnover of £10,000 per annum, what type of
self-assessment return would h e t h e n be required to file each year?
C Andrew may file a short tax return.
D Andrew must file a full tax return.
LO2c

4 Edward is an employee of Theatre Ltd with an annual salary of £66,000. In addition, Edward has run his own business for a
number of years with an average annual profit of about £25,000.
What is the e n d of the statutory retention period for Edward's records relating to the tax year ended 5 April 2024?
A 31 January 2029
B 31 January 2030
Justine is an employee of Stage Ltd with an annual salary of £45,000. She also owns a number of shares o n which she
receives dividend income in excess of £1 0,000 per year.
What is the e n d of the statutory retention period for Justine’s records relating to the tax year e n d e d 5 April 2024?
C 31 January 2026
D 31 January 2027
LO2a
5 Beatrice received her tax return for the tax year 2022/23 in April 2023 and filed it o n 31 March 2024. She has now realised
that she made a mistake i n the return and wishes to amend it accordingly.
Requirement
What is the latest date by which the amendment can b e made?
A 5 April 2025
B 30 April 2025
C 31 January 2025
D 31 March 2025
LO2c

6 Eugenie is a higher rate taxpayer. She is an employee a n d has run her own business as a sole trader with profits in excess
of £100,000 per annum f o r a number of years.
Requirement
When is Eugenie's income tax not deducted at source payable for the year 2023/24?
A 31 January 2024 and 31 July 2024
B 31 January 2024, 31 July 2024 and 31 January 2025
C 31 July 2024 and 31 January 2025
D 31 January 2025
LO2d

7 Harry's total income tax liability for 2022/23 was £1 5,000 and his Class 4 NIC liability was £2,000. During 2022/23 £6,000
of his income tax liability was paid via tax deducted at source. Harry's capital gains tax liability for 2022/23 was £2,500.

Requirement
What is Harry's first payment o n account for 2023/24?

LO2d

8 Sophie made the following payments of tax relating to 2023/24.

1st payment o n account 1 5 February 2024 22,000

2nd payment o n account 31 August 2024 1 5,000

Balancing payment 30 April 2025 1 1,000

Requirement
Which of the following statements in relation to Sophie's payments is correct?
A All of the payments were made late a n d will be liable to a penalty at 5%.
B All of the payments were made late a n d will be liable to interest from the d u e date to the day before payment plus
those made more than 30 days late will be liable to a penalty at 5%.
C All of the payments were made late a n d will be liable to interest from the d u e date to the day before payment b u t
only the balancing payment is liable to a penalty at 5%.
D All of the payments were made late a n d will be liable to interest from the d u e date to the day before payment plus a
penalty at 5%.
LO2e