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General Business Quiz
1. In what circumstance, a company is allowed to extend its accounting period more than once within five years?
 
the company is extending its accounting reference date to align with that of a parent or subsidiary undertaking established in the European Economic Area
the company is subject to an administrative order
the company has obtained the specific approval from the Secretary of State
All of the above
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Types of VAT Products

 

There are at present three types of Value Added Tax (VAT) rates on goods and services.

  1. The standard rate is currently at 20%
  2. A special five percent rate applying to domestic fuel, installation of energy-saving materials in homes and women's sanitary products.
  3. The zero rated.

Most of the goods and services are standard rated unless the UK government specifies otherwise.  Zero rated goods and services charge VAT at 0% and the business still can reclaim input tax on its purchases in the normal way.

The main supplies that fall under the zero rated categories at present including the following:

  • Most food and drink except catering, or certain items like chocolate, crisps and so on, or 'hot food' to be taken away.
  • Books and newspapers.
  • Young children's clothing and footwear.
  • Public transport excluding taxis, hire cars or 'fun' transport, such as steam railways.
  • Exports,
  • Sales of, and the construction of, new domestic buildings only.
  • dispensing prescriptions.
  • Mobile homes and houseboats

Do not confuse exempt and zero-rated goods and services. The effect of the two categories is quite different. Neither charges VAT On what they sell, but the exempt category cannot claim VAT back on what they have paid, while the zero-rated category can.

Concise Accountancy – Making VAT administration simple for businesses

 
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