AAT L3 Indirect Tax (UK VAT)

Question 1

Which of the following supplies is EXEMPT from UK VAT?

Accepted Answer

Insurance services

Answer

Standard-rated goods sold to consumers

Answer

Zero-rated food items

Answer

Children's clothing

Question 2

A VAT-registered business can reclaim input VAT on:

Accepted Answer

Goods and services used exclusively for taxable business supplies

Answer

Business entertainment of UK customers

Answer

Private use of a company car

Answer

Exempt supplies made by the business

Question 3

The VAT flat rate scheme allows a business to:

Accepted Answer

Pay a fixed percentage of gross turnover to HMRC instead of calculating input and output VAT separately

Answer

Charge a lower rate of VAT to customers

Answer

Avoid registering for VAT

Answer

Submit annual rather than quarterly VAT returns

Question 4

What is the time limit for a VAT-registered business to reclaim input VAT on a purchase invoice?

Accepted Answer

4 years from the invoice date

Answer

3 months from the invoice date

Answer

12 months from the invoice date

Answer

6 years from the invoice date

Question 5

A VAT return must normally be submitted to HMRC within how many days of the end of the VAT period?

Accepted Answer

1 calendar month and 7 days

Answer

7 days

Answer

14 days

Answer

30 days

Question 6

Zero-rated supplies differ from exempt supplies because:

Accepted Answer

VAT is charged at 0% but the supplier can reclaim input VAT on related costs

Answer

They are not subject to any VAT rules

Answer

They carry a VAT charge of 5%

Answer

The supplier cannot reclaim any input VAT