The Chartered Tax Adviser Examination

Transcription

1 Candidate Number You must tick the box below if you have answered this Module. The Chartered Tax Adviser Examination November 2010 AWARENESS MODULE A VAT INCLUDING STAMP TAXES You should only answer this module if you have not sat/do not intend to sit either the VAT on UK Domestic Transactions (including SDLT) Advisory paper or the VAT on Cross-Border Transactions & other Indirect Taxes Advisory paper. Each question carries 5 marks. You should answer all 12 questions from the modules you choose. You should answer questions in brief bullet points and/or summary computations where appropriate. You must answer questions in the spaces provided. You may not need all the space provided. You should make all calculations to the nearest month and pound unless stated otherwise. Unless otherwise indicated by the provision of additional table information, you may assume that 2009/10 rates and allowances continue to apply for 2010/11 and future years. Candidates referring to actual or pending rates and allowances for 2010/11 and future years will not be penalised.

2 1. On 1 January 2010 changes to the place of supply rules for supplies of services were introduced as part of the VAT Package. State the current post 1 January 2010 basic place of supply rules for the supply of services and three of the exceptions to it. Page 2 of 25

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4 2. Explain the meaning of consideration for VAT purposes and give four examples of what would be "consideration", or would be part of consideration. Page 4 of 25

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6 3. A business that has ceased to be registered for VAT can still claim a repayment of Input Tax. State how such a claim should be made, what HM Revenue & Customs are likely to require, and what, if any, time limits apply to such claims. Page 6 of 25

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8 4. State the information that must be shown on a less detailed tax invoice, and state what supplies a less detailed tax invoice must NOT be used for. Page 8 of 25

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10 5. Buyer Co is a brand new company set up to acquire a widget manufacturing business, which has a steady turnover of 10,000 per month, from Seller Co which is VAT registered. Seller Co intends to treat the transfer as a VAT-free transfer of a going concern (TOGC). Seller Co is not transferring its VAT registration number to Buyer Co as it has many other business activities. Buyer Co is currently not VAT registered, and Buyer Co and Seller Co are not connected. Explain if and when Buyer Co will have to register for VAT. (You may assume that the sale meets all of the usual conditions necessary for Seller Co to treat it as a TOGC.) Page 10 of 25

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12 6. You have suggested a VAT savings scheme to your client. Draft brief notes explaining whether your client will have an obligation to disclose his implementation of the scheme to HM Revenue & Customs under the VAT Avoidance Disclosure regulations. Page 12 of 25

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14 7. A house builder selling a new house or flat will usually make a zero rated taxable supply. Despite making such a taxable supply, not all of the VAT he has incurred on goods purchased which he has incorporated into the dwelling, is recoverable. Explain briefly why in such circumstances, not all of the input VAT may be recovered, and give three examples of goods incorporated into new dwellings on which the VAT incurred is not recoverable. Page 14 of 25

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16 8. With effect from 1 April 2010, new rules were introduced for the filing of paperless VAT returns and the paying of any VAT due, which for many businesses give them extra time to pay the VAT due. Explain briefly what those new rules are and when businesses cannot take advantage of the extra time to pay VAT due. Page 16 of 25

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18 9. Suppliers sometimes issue pro-forma invoices. Explain the VAT implications for both the supplier and the customer, when pro-forma invoices are issued and received. Page 18 of 25

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20 10. Explain when the supply of vocational training is exempt, and when it is taxable at the standard rate. Page 20 of 25

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22 11. Explain the obligations of a taxpayer who undertakes a transaction which renders them liable to Stamp Duty Land Tax. Page 22 of 25

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24 12. Calculate the Stamp Duty Land Tax payable on the rental of a commercial property with a premium payable of 300,000, and a Net Present Value (NPV) of the rent payable, of 175,000. Page 24 of 25

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