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  • VAT Memo - Scope of VAT - What is a supply? - Outside the scope of VAT - 252
    Certain transactions will be outside the scope of VAT, either because they: - do not meet the criteria detailed at ¶25; or - fall within one of the following categories: - supplies that are specifically defined in the legislation as supplies of neither goods nor services (¶258); - compensation or damages (¶264); - supplies of inherently illegal products (¶266); - the loss or destruction of an asset (¶268+); - the issue of new shares by a company (¶2420+); - a business gift costing not more than £50 (¶1465+);...
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  • VAT Memo - Scope of VAT - What is a supply? - Supply of goods or services? - Goods - 277
    The following are defined to be supplies of goods: Supply Reference ¶¶ Any transfer of the whole property in goods Sch 4 para 1 VATA 1994 ¶280+ The transfer of possession of goods in some circumstances Sch 4 para 1 VATA 1994 ¶290 Returned goods in some circumstances SI 1995/1268 reg 4 ¶292 Sales in satisfaction of a debt Sch 4 para 7 VATA 1994 ¶294 A transfer or disposal of business assets Sch 4 para 5 VATA 1994 ¶296+ A gift of business assets Sch 4 para 5(2) VATA 1994 ¶1465+ Permanent private use...
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  • VAT Memo - Output tax - Value of supply - General valuation rules - No consideration - 944
    Where a deemed supply of goods is provided for no consideration, the value of the supply is the amount that would be payable if the person making the supply were to purchase goods identical to those supplied (or, where this cannot be determined, goods similar to those supplied) at the time of the disposal. If it is not possible to establish this figure, the fall-back value is the cost of producing the goods if they were produced at the time of disposal. In addition, the legislation specifically treats certain...
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  • VAT Memo - Output tax - Deemed supplies - Gifts - 1465
    Gifts of business goods are supplies that are subject to VAT; output tax should be accounted for by the donor. However, gifts of goods made in the course or furtherance of a business are not supplies if the cost of acquiring or producing all gifts made to the same person in any 12-month period is less than £50. Gifts of services are generally not treated as supplies, unless they have been bought in from a third party, in which case VAT must be accounted for. If a taxable person simply pays a third party to...
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  • VAT Memo - Particular activities - Retailers - VAT on takings - retail schemes - Elements common to all schemes - Gross takings - 6368
    The daily gross takings are key to all of the retail schemes, and are a record of all retail supplies made on each day of trading, as evidenced by till rolls, sales vouchers, or even a manual list. Takings include: - all payments received from cash customers; - the full VAT-inclusive value of credit sales on the date when the sale is made (even if just a deposit is received); - the face value of any vouchers or tokens accepted in place of cash, unless the coupons are not honoured by the promoters; and - the...
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  • VAT Memo - Particular activities - Retailers - VAT on takings - retail schemes - Elements common to all schemes - Errors - Mistakes in operating the scheme - 6398
    A retailer may make a mistake when using a scheme; this will lead to an assessment for any under-declared VAT (¶3625+). Depending on the circumstances of the case, HMRC will consider: - the use of estimates to correct past output tax amounts; or - whether the business made a reasonable decision at the beginning of the scheme year, even though this has proved to be wrong (e.g. anticipating that the majority of goods sold would be standard-rated, when in actual fact more zero-rated goods were sold). Any assessment...
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