4 Pumpkin Ltd purchased a p l o t of land in August 201 8 for £60,000, incurring legal fees of £3,000 o n acquisition.

Work to
improve drainage was carried out o n the land in 2019 at a cost of £25,000. The company sold the land in November 2023
for proceeds of £80,000, incurring selling costs of £1,750.
Requirement
What is the chargeable gain or allowable loss o n the disposal?
A (£9,750)
B £15,250
C £(8,000)
D £(6,750)
LO 4b

5 Party Ltd purchased a building for investment purposes i n January 201 8 for £150,000. The property was redecorated at a
cost of £24,000 and the single glazed windows were replaced with double glazing costing £40,000 i n December 2018.
The company sold the building in September 2023 for £425,000.

Requirement
What is the gain in Party Ltd's corporation tax computation for the year e n d e d 31 December 2023?
A £275,000
B £211,000
C £251,000
D £235,000
LO 4b

6 Tractor Ltd realised a chargeable gain of £16,000 o n disposal of a building in January 2024. Tractor Ltd has augmented
profits below the lower limit
Requirement
What is the tax suffered by Tractor Ltd o n its chargeable gain?
A £1,000
B £1,900
C £3,040
D £3,200
LO 4c

7 Lettuce Ltd was incorporated o n 1 1 May 2023. It opened an inte re st-bearing building society account o n 1 July 2023 and
began trading o n 1 January 2024. It will make u p its first set of accounts to 30 September 2024 and annually thereafter.

Requirement
What are the dates of Lettuce Ltd's first accounting period for corporation tax purposes?
A 1 1 May 2 0 2 3 - 3 1 December 2023
B 1 July 2023 - 31 December 2023
C 1 January 2024 - 30 September 2024
D 1 January 2024 - 31 December 2024
LO 5a
 8 Which of the following statements about corporation tax is true?
A A company which is centrally managed and controlled in the UK will always be liable to UK corporation tax o n its
worldwide profits.
B A company which is incorporated i n the UK will only be liable to UK corporation tax o n its worldwide profits if it is also
centrally managed and controlled in the UK.
C A company which is incorporated abroad and centrally managed a n d controlled abroad, will still be liable to UK
corporation tax o n its worldwide profits.
D A company which is incorporated abroad will never be liable to UK corporation tax o n its worldwide profits.
LO5d

9 Airedale Ltd was incorporated o n 1 1 June 2023. It opened an interest- be aring building society account o n 1 August 2023
and began trading o n 1 February 2024. It makes u p its first set of accounts to 30 September 2024 and annually thereafter.
Requirement
What are the dates of Airedale Ltd's first accounting period for corporation tax purposes?
A 1 August 2023 - 31 July 2024
B 1 1 June 2023 - 31 January 2024
C 1 February 2024 - 3 0 September 2024
D 1 August 2023 - 31 January 2024
LO 5a

1 0 Papillon Ltd has taxable total profits of £1 50,000 for its three-month accounting period to 31 December 2023. Papill o n Ltd
d i d not receive any dividends, and has n o associated companies.

Requirement
What is Papillon Ltd's corporation tax liability for the three months ended 31 December 2023?

Papillon Ltd's corporation tax liability £

LO5d

1 1 Jaffrey Ltd is a UK-resident trading company that made various disposals during the year e n d e d 31 March 2024.
Select how the resulting gains o r losses should b e treated in the corporation tax computation of Jaffrey Ltd for the year
e n d e d 31 March 2024.

Requirements
Loss of £5,900 o n the sale of two cars used in the business; each car cost and was sold for more than £6,000:
A Chargeable gain
B Exempt
C Allowable capital loss
Gain of £86,000 o n the sale of an investment property:
D Chargeable gain
E Exempt
F Allowable capital loss
LO4a
12 Lam Ltd began trading o n 1 February 2022 and had the following periods of account:
- 1 February 2022 to 31 July 2023
• 1 August 2023 to 30 April 2024 (when the trade ceased)
Requirement
Its first corporation tax accounting period was:
A 1 Februa ry 2022 to 3 1 Ju ly 2022
B 1 February 2022 to 31 January 2023
C 1 February 2022 to 3 0 April 2023
D 1 February 2022 to 31 July 2023
LO 5a

13 Jam Ltd has taxable total profits of £160,000 for the year e n d e d 31 December 2023. Jam Ltd received dividends from
unconnected companies of £25,000. It has no associated companies.

Requirement
What is the corporation tax payable by Jam Ltd for the year ended 31 December 2023?

Corporation tax payable

LO5d

1 4 Drisko Ltd has taxable total profits of £1,450,000 for the year ended 31 March 2024. During the year e n d e d 31 March
2024 it received exempt dividends from UK companies of £135,000 of which £20,000 were received from an 80%
subsid iary.

Requirement
What are Drisko Ltd's augmented profits for the year ended 31 March 2024?
A £1,585,000
B £1,565,000
C £1,470,000
D £1,450,000
LO 5b, 5 d

15 Laguni Ila Ltd has paid its corporation tax in quarterly instalments for many years. It has one 80% subsidiary. In the year
e n d e d 31 December 2023 Lagunilla Ltd has taxable total profits of £550,000. In December 2023 it received exempt
dividends of £300,000 from its subsidiary.
Requirement
By which date is Lagunilla Ltd's final corporation tax payment due f o r t h e year ended 31 December 2023?
A 1 4 April 2024
B 1 October 2024
C 31 December 2024
D 31 January 2025
LO 5b, 5 d
16 Pasta pic sold one of its warehouses o n 1 July 2023 for £2,125,000. The warehouse originally cost £432,000 in February
2018. O n disposal Pasta pic paid estate agents fees of £24,969. At acquisition legal fees were £3,000 and stamp duty land
tax was £12,960. During its ownership Pasta pic a d d e d a canteen to the building at a cost of £48,000.

Requirement
What is Pasta pic's chargeable gain o n this disposal?

Chargeable gain £

LO 4b

17 Ardent Ltd bought a factory o n 12 February 201 9 for £165,000. At acquisition, professional fees were £2,450 a n d stamp
duty land tax was £1,650. In May 2019 an extension was a d d e d to the factory at a cost of £23,000.
In October 2023 Ardent Ltd sold the factory, which had always been used in its trade, for £312,000. Prior to the sale,
Ardent Ltd repaired water damage o n one wall at a total cost of £3,000.
Requirement
What is the chargeable gain o n the sale of the factory?

Chargeable gain £

LO 4b

18 Rhodes Ltd has taxable total profits for the nine-month period ended 31 March 2024 of £1,088,600. Rhodes Ltd has n o
associated companies and received n o dividends.

Requirement
What is the corporation tax payable by Rhodes Ltd for the period ended 31 March 2024?

Corporation tax payable

LO5d

1 9 In the year ended 31 March 2024, Sky Ltd has taxable total profits of £30,000. It receives dividends of £12,000 from
unconnected companies.

Requirement
What is Sky Ltd's corporation tax liability for the year e n d e d 31 March 2024?

Corporation tax payable

LO5d
2 0 Cloud Ltd has provided the following information for the year e n d e d 31 May 2024:

Adjusted trading profits 42,000

Chargeable gains 10,000

Dividend income 9,000

Charitable donations paid 6,000

Cloud Ltd has n o associated companies.

Requirement
What is Cloud Ltd's corporation tax payable for the y/e 31 May 2024?
A £10,583
B £11,500
C £9,054
D £8,740
LO5d

21 Storm Ltd has taxable total profits of £1 90,000 and dividends received from unconnected companies of £8,000 for its 9-
month accounting period to 31 December 2023.
Requirement
What is the corporation tax payable?

Corporation tax payable

LO5d

22 Sun Ltd has taxable total profits of £100,000 in the y/e 31 March 2024, and receives dividends of £20,000 from
unconnected companies. Sun Ltd owns 60% of the shares in Light Ltd, and 45% of the shares in Dark Ltd.
Requirement
What is the corporation tax liability?
A £25,000
B £24,937
C £19,000
D £23,375
LO5d

23 Wing Ltd prepared accounts to 31 December 2024. On 1 March 2024 it purchased a print machine for £90,300 and a
hybrid car with emissions of 30 g / k m for £35,000. Wing Ltd has no tax written d o w n value brought forward in the main
pool at the start of the year.

Requirement
What are the total capital allowances?
A £96,600
B £22,554
C £125,300
D £90,300
LO 5c
2 4 Beak Ltd has tax-adjusted trading profits of £250,000 for the y/e 31 March 2024. At 1 April 2023 it had a tax written d o w n
value of £65,000 in the main pool. O n 1 May 2023 it purchased a machine for £1 9,000.
Requirement
What is Beak Ltd's trading income f o r t h e y/e 31 March 2024?
A £30,700
B £280,700
C £231,000
D £219,300
LO5c

25 Feather Ltd prepares accounts for an 1 8-month period to 30 September 2024. The tax written down value of the main
pool at 1 April 2023 was £96,000. Feather Ltd purchased a photocopier o n 1 July 2023 for £50,000.
Requirement
What are the capital allowances for each accounting period?
A 1 2 m/e 31 Mar 2 4 £67,280, 6 m/e 3 0 Sep 2 4 £7,085
B 18 m/e 30 Sep 2 4 £75,920
C 1 2 m/e 31 Mar 2 4 £26,280, 6 m/e 3 0 Sep 2 4 £6,275
D 6 m/e 30 Sep 2 4 £58,640, 1 2 m/e 30 Sep 2 4 £ 1 2, 725
LO 5c

26 Petal Ltd began trading o n 1 January 2023. O n 1 May 2023 it purchased a van for £47,000. The van is used 30% of the
time for private use of the managing director, and has CO 2 emissions of 40g/km.

Requirement
What is the maximum capital allowance claim available to Petal Ltd f o r t h e year e n d e d 31 December 2023?
A £8,640
B £5,922
C £47,000
D £32,900
LO 5c

27 Garage Ltd has a tax written d o w n value brought forward o n the main pool of £1 20,000 at 1 April 2023. During the year
e n d e d 31 March 2024 the following transactions took place:
* Purchase of equipment for £45,000
“ Sale of machine for £32,000

Requirement
What are the capital allowances available to Garage Ltd f o r t h e year ended 31 March 2024?

Capital allowances

LO 5c
1 1 Value a d d e d tax

1 Clementine orders some goods from Forty-Niner pic on 1 May. They are dispatched on 8 May. On 4 June Clementine
receives the respective invoice dated 2 June. Her payment arrives at the company on 7 June. Forty-Niner pic does not
operate the cash accounting scheme.
Requirement
Which of the following options is the tax point for the transaction?
A 1 May
B 8 May
C 2 June
D 7 June
LO6d

2 Matilda has been a VAT-registered trader for a number of years and has recently purchased various items for use in her
trade.
Requirement
Select the item on which Matilda cannot recover the input tax.
A Van accessories purchased a year ago
B Fixed partitions for use in the office
C A motorcycle for business deliveries
D Entertaining costs of UK business customers
LO 6e

3 Bob, who is not registered for VAT, has just completed 12 months' trading, the turnover details for the pastyear being as
follows:

£
Exempt supplies 28,000
Standard-rated supplies 58,000
Zero-rated supplies 29,000

Requirement
Which of the following options correctly identifies Bob's liability to register for VAT?
A He is not required to register.
B He must register, based on turnover of exempt and standard -rated supplies.
C He must register, based on turnover of standard and zero-rated supplies.
D He must register, based on turnover of exempt, standard and zero-rated supplies.
LO 6c
4 Charlene, a VAT-registered trader, invoices Bronco Ltd in November 2023 for standard -rated supplies of £1,000, excluding
VAT.
The following settlement discounts are offered.

Payment within Discount

7 days 10%

1 4 days 5%

21 days 2.5%

Bronco Ltd, whose normal credit term is 21 days, agrees beforehand to settle the invoice within 1 4 days, but actually takes
2 8 days.

Requirement
How much VAT is Bronco Ltd required to pay?
A £180
B £195
C £190
D £200
LO 6e

5 Viking Raiders Ltd began trading o n 1 January 2023. Details of the company's recent taxable turnover are as follows.

2023 £ 2024 £

January 720 January 12,970

February 1,220 February 13,960

March 2,250 March 10,770

April 2,490 April 11,860

May 3,890
June 4,620

July 5,870

August 5,890

September 5,920

October 7,170

November 9,800

December 10,270

Requirement
By what date must Viking Raiders Ltd notify HMRC of its liability to register?
A 29 February 2024
B 30 March 2024
C 31 March 2024
D 1 April 2024
LO 6c
6 Paint Ltd incurred the following capital expenditure (including VAT).

New car for salesman 12,810 (80% business use)

New motor van 9,450

Second-hand contai ner lorry 23, 1 00

Requirement
How much VAT can be reclaimed in respect of the above?
A £3,850
B £5,425
C £7,133
D £7,560
LO 6e

7 Tariq ordered some goods from Rumpole Ltd, which issued a VAT invoice o n 1 February. As payment for the goods, Tariq
sent a cheque which Rumpole Ltd received o n 3 February, The goods were dispatched o n 8 February and received by
Tariq on 1 0 February, Rum pole Ltd is not a member of the cash accounting scheme.
Requirement
Which of the following options is the tax point for the supply?
A 1 February
B 3 February
C 8 February
D 10 February
LO6d

8 Quentin, who is registered for VAT, supplies computer hardware and related support services.
O n 2 8 March 2024 he gave a new laptop to his sister. The laptop cost the business £2,500 (excluding VAT) in January
2024 but the same model could have been purchased for £2,000 on 28 March 2024 (excluding VAT).

Requirement
How much output VAT should Quentin include in his VAT return in respect of the above transaction?
A £333.33
B £400.00
C £416,67
D £500.00
LO6e

9 Valerie is a sole trader running two separate businesses - a wholesale fabric business and a clothes retail business. She is
also senior partner in a firm of interior designers. All three businesses have a taxable turnover in excess of £100,000.

Requirement
What is the maximum number of VAT registrations to which Valerie will b e a party?
A One
B Two
C Three
D She may elect for two o r three
LO 6c
1 0 Cross pic issues a n invoice for standard- rated goods i n February 2024 as follows.

Goods excluding VAT 1,800

Less trade discount (180)

Cash discount (only available if the invoice is settled within 30 days) (108)

Cash to pay within 3 0 days 1,512

Requirement
How much VAT will b e paid overall if the customer pays within 30 days?
A £360.00
B £338.40
C £302.40
D £324.00
LO6e

11 Priscilla started trading in the winter of 2022 but d i d not register for VAT because she expected that her turnover would be
below the registration limits. O n 31 May 2023 she realised that her future taxable turnover would exceed £85,000 i n the
next 30 days alone.
By what date must Priscilla notify HMRCthat she is liable to be registered for VAT?
A 31 May 2023
B 29 June 2023
C 1 July 2023
From what date must Priscilla charge VAT o n her taxable supplies?
D 31 May 2023
E 30 June 2023
F 1 July 2023
LO6c

1 2 Paola, who is registered for VAT, runs a chauffeur-driven car hire service. In the quarter e n d e d 31 March 2024 she lent a car
and chauffeur to her cousin, to drive him to the airport. In the same quarter Paola arranged f o r a car and chauffeur to drive
her to the church for her wedding.

Requirement
Which of these, if any, will be treated as a supply of services for VAT purposes?
A Neither
B Loan of car to her cousin only
C Use of car for her wedding only
D Both
LO6a
13 Diane, a VAT-registered trader who is not a member of the cash accounting scheme, supplies some goods to a customer.
The goods are dispatched o n 27 March. Diane's VAT accounting period ends o n 31 March. An invoice is issued o n 2 April
and payment is received o n 4 April.
Requirement
What is the tax point?
A 27 March
B 31 March
C 2 April
D 4 April
LO6d

1 4 Walton Ltd, a manufacturing company which is registered for VAT, purchased a motor car for £10,470 (which included
£160 for vehicle excise duty) inclusive of VAT. The car is used by one of the employees for business a n d private use.

Requirement
What amount should b e included in the capital allowance computation as the acquisition cost of this vehicle?
A £8,592
B £8,725
C £10,310
D £10,470
LO6b

15 Which of the following is always a condition which must b e fulfilled if input tax o n the purchase of goods from a VAT-
registered person is to be recovered?
A The goods must be standard-rated or zero-rated.
B A tax invoice is held .
C The supplier has been paid.
D The goods have been resold to a customer.
LO 6e

16 Parminder runs two separate businesses. The first business is a clothes repair service which has taxable supplies of
£35,000 per annum. The second business is a carwash service which has taxable supplies of £245,000 per annum. Both
businesses are run by Parminder as a sole trader.
Requirement
Which of the businesses is relevantin determining whether Parminder should register for VAT?
A Both businesses
B The clothes repair service
C The carwash service
D Neither business
LO 6c
1 7 Sheep pic began trading o n 1 December 2023. O n 1 March 2024 it won a contract to supply goods o n 1 5 March 2024
worth £350,000.

Requirements
By what date must Sheep pic notify HMRC that it is liable to b e registered for VAT?
A 1 April
B 30 March
C 30 April
From what date must Sheep pic charge VAT o n its taxable supplies?
D 1 March
E 31 March
F 1 April
LO 6c

1 8 Gobble pic made the following two standard-rated supplies during July 2023:
Clothes (exclusive of VAT) = £400
Material (inclusive of VAT) = £514

Requirement
What is the total amount of output VAT collected?
A £169.47
B £165.67
C £182.80
D £152.33
LO6e

19 From the following list of purchases, select two items for which the input VAT is always wholly irrecoverable.
A UK client entertaining
B Fuel in company pool cars
C Capital item still used exclusively for business use b u t purchased two months pre- registration
D Gifts of goods to customers
E Company car for employee use which is a taxable benefit for income tax purposes
LO6e
2 0 In his first year of trading to 31 December 2022 Wayne's taxable turnover from his business was £3,700 each month.
For the first seven months of 2023 his taxable turnover was as follows:

2023

January 6 J 00

February 7,800

March 8,500

April 12,400

May 13,700

June 14,900

July 1 3,000

Requirement
By what date must Wayne notify HMRC of his liability to register for VAT?
A 30 May 2023
B 30 June 2023
C 30 July 2023
D 30 August 2023
LO 6c

21 Benedict began trading o n 1 August 2023 repairing electrical equipment and applied t o register for VAT with effect from
1 December 2023. Prior to registration he had incurred VAT as follows.

Van purchased o n 3 May 2023 still in use at 30 November 2023 500

Accou ntancy fees o n invoice dated 5 Septem ber 2023 30

Stock of spare parts as at 3 0 November 2023 240

Requirement
How much VAT can Benedict reclaim in respect of these items?
A £770
B £740
C £270
D £240
LO 6e

22 Which of the following statements about VAT is true?

A A trader who makes only exempt supplies may register for VAT.
B VAT is charged o n zero-rated supplies.
C VAT o n standard-rated supplies is always charged at 5%.
D A trader making taxable supplies may only register for VAT once supplies exceed the VAT registration threshold.
LO 6b, 6c
23 Michaela began trading as a cabinet maker on 1 October 2022. Her quarterly turnover (spread evenly over the quarter) is
as follows.

Quarter ended £
31 December 2022 12,000
31 March 2023 13,200
30 June 2023 19,500
30 September 2023 26,700
31 December 2023 32,700
31 March 2024 35,000

Requirement
By what date must Michaela notify HMRC of her liability to register for VAT?
A 30 December 2023
B 31 December 2023
C 30 January 2024
D 31 January 2024
LO 6c

24 Miranda's taxable sales have dropped to £30,000 pa and forecast annual sales are expected to be between £30,000 and
£40,000.
Requirement
Which of the following options correctly identifies the VAT implications for Miranda?
A Miranda must deregister and will need to pay output VAT on the deemed supply of stock and capital items still held at
deregistration.
B Miranda must deregister and will need to pay output VAT on the deemed supply of stock and capital items still held at
deregistration where the output VAT exceeds £1,000.
C Miranda may choose to deregister but would then need to pay output VAT on the deemed supply of stock and capital
items still held at deregistration if the output VAT exceeds £1,000.
D Miranda may choose to deregister but would then need to pay output VAT on the deemed supply of stock and capital
items still held at deregistration.
LO 6c

25 Which of the following is not a deemed supply for VAT purposes?

A Sale of goods on hire purchase
B Gifts of business assets worth £100 each to a customer
C Gifts of services worth £100 to a customer
D Drawings of stock by the proprietor of a business
LO6a
26 Kevin is a VAT-registered trader who has suffered input tax as follows o n purchases in the past month.

Television for Kevin's wife 350

Machine for business use (Kevin has lost the VAT receipt) 989

Office stationery 256

Requirement
How much input tax may Kevin recover o n these items?
A £256
B £989
C £1,245
D £1,595
LO6e

27 Which of the following statements about VAT is true?

A Where discounts are offered VAT should be calculated based o n those discounts offered, rather than actually
obtained.
B A gift of business services is not a taxable supply.
C A supply of a business asset used for private purposes is not a taxable supply.
D Input VAT is recoverable o n company cars to the extent they are used for business purposes.
LO 6b, 6e

28 Flight pic is VAT-registered but is not a member of the cash accounting scheme. A major customer of Flight pic went into
liquidation today a n d there is little hope of its d e b t being recovered. The invoice was issued o n 1 August 2023 with a
credit agreement of payment by the e n d of the month. The associated output VAT was paid to HMRC in the quarter ended
31 October 2023 return. The d e b t will be written off in Flight pic's accounts o n 31 March 2024.

Requirement
Assuming it is now 1 January 2024, what is the earliest date the output VAT could be reclaimed from HMRC?
A 1 January 2024
B 1 February 2024
C 29 February 2024
D 31 March 2024
LO6e

2 9 Sunil ordered some g o o d s from Grumpy Ltd, which issued a VAT invoice o n 1 September. Sunil sent a cheque for the
goods which Grumpy Ltd received o n 3 September. The goods were dispatched o n 8 September a n d received b y Sunil
o n 10 September. Grumpy Ltd is not a member of the cash accounting scheme.
Requirement
What is the tax point for the supply?
A 1 September
B 3 September
C 8 September
D 1 0 September
LO6d
3 0 Tien orders some goods o n sale or return from Spice Ltd o n 1 October. They are dispatched on 9 October. Tien adopts
the goods o n 1 November. Tien then receives the invoice for the g o o d s dated 2 0 November. Spice Ltd receives payment
for the goods o n 29 December. Tien and Spice Ltd are not members of the cash accounting scheme.

Requirement
What is the actual tax point of the transaction?
A 1 October
B 9 October
C 1 November
D 20 November
LO6d

31 Ahsan orders some goods from Land Ltd o n 1 October. They are dispatched o n 1 8 October. Ahsan then receives the
invoice for the g o o d s dated 2 9 October. Land Ltd receives payment for the goods o n 7 December. Ahsan is not a member
of the cash accounting scheme.
Requirement
What is the actual tax point of the transaction?
A 1 October
B 18 October
C 29 October
D 7 December
LO6d

32 Disco Ltd intends to register voluntarily for VAT.

Requirement
Which of the following statements is correct?
A Disco Ltd must b e expecting to be in a repayment position.
B Disco Ltd must not be making any exempt supplies.
C Disco Ltd must b e making o r intending to make some taxable supplies.
D Disco Ltd must b e expecting to exceed the VAT threshold within the next 1 2 months.
LO 6c

33 Tambourine Ltd makes stand a rd -rated supplies. At the e n d of October 2023 its taxable turnover in the previous 12
months exceeds £85,000 for the first time. Its turnover is expected to rise gradually.
The company is required to notify HMRC of its liability to register by:
A 1 November 2023
B 30 November 2023
C 1 December 2023
Registration takes effect from:
D 1 November 2023
E 30 November 2023
F 1 December 2023
LO 6c
3 4 Arthur, who is not registered for VAT, has just completed 12 months' trading. The turnover for the trading year is as
follows.

Exempt supplies 14,300

Taxable supplies 69,250

Additionally Arthur sold a n item of machinery (standard-rated) for £14,000.

Requirement
Based on the above information, does Arthur have any liability to register for VAT?
A Yes, based o n exempt and taxable supplies of normal trading
B Yes, based o n taxable supplies of normal trading, plus the sale of machinery
C No, based o n taxable supplies of normal trading
D Yes, based o n exempt and taxable supplies of normal trading, plus the sale of machinery
LO 6c

35 Abida is a salesman who incurred the following expenditure during his work.

Net VAT Gross

£ £ £

Hotel accommodation reimbursed to him by his employer 320 64 384

Meals paid out of his salary 200 40 240

In addition his employer purchased a laptop computer for Abida to use as an essential part of his job. The employer
agreed 10% personal use for this equipment which had cost £1,080 (including VAT of £180).

Requirement
How much may be shown as net deductible input tax o n the employer's VAT return?
A £226
B £244
C £266
D £284
LO 6e

36 Books Ltd incurred the following capital expenditure (including VAT).

Car for salesman used for business and private purposes 15,750

Delivery van 10,080

Requirement
How much VAT can be reclaimed in respect of the above?
A £2,016
B £1,680
C £2,625
D £4,305
LO6e
37 Identify whether the following are correct conditions for the reclaim of output tax as b a d debt relief.

Requirements
A period of six months has elapsed since the goods were supplied.
A Correct
B Incorrect
Tax o n the supply has been accounted for and paid.
C Correct
D Incorrect
The bad d e b t claim must be made within six years of becoming eligible for relief.
E Correct
F Incorrect
LO 6e

38 Music Ltd has just received the following invoice from a supplier with a delivery of equipment (all figures exclude VAT).

Musical equipment 6,400

Less 1 0% discou nt for settlement within 14 days (640)

Cash to pay if settled within 14 days 5,760

If payment is made within 21 days the discount is reduced to 5%.

Music Ltd has a policy of paying one week after being invoiced.
Requirement
What is the correct amount of VAT that Music Ltd will pay?
A £960
B £1,152
C £1,216
D £1,280
LO 6e

3 9 Peter purchases goods from Jemima. Peter paid for the g o o d s when he ordered t h e m o n 3 April. Jemima made the goods
available to Peter o n 7 April, but Peter d i d not collect them until 1 1 April. Jemima issued the invoice o n 16 April.

Requirement
What is the actual tax poi nt for this supply?
A 3 April
B 7 April
C 11 April
D 16 April
LO6d
40 Identify whether each of the following is a taxable supply for VAT purposes.
Requirements
Steve, who is registered for VAT, runs a plant hire company. In the quarter ended 31 March 2024 he let his brother use a
digger at no charge.
A Taxable
B Not taxable
In the quarter to 30 June 2024 h e used the same digger to help dig the foundations for the extension being built onto his
house.
C Taxable
D Not taxable
LO6a

41 Block Ltd, a building company which is registered for VAT, purchased a motor car for use by the sales director for £25,380
(including £705 for the factory fitted satellite navigation), inclusive of VAT, The car is used 20% privately by the sales
director.
Requirement
What is the cost to the company of the vehicle for capital allowance purposes?
A £25,380
B £24,675
C £21,150
D £20,563
LO6b

42 Charlie has a shop selling women's clothing. She gave a coat that she had b o u g h t for £120 to her sister. She would have
sold the coat in the shop for £200. All figures are VAT-inclusive.

Requirement
What is the value of the coat for VAT purposes?
A £200.00
B £166.67
C £120.00
D £100.00
LO6b

43 Gertrude has a quarter e n d e d 31 March 2024. Her normal payment terms are one calendar month after invoice date.
Identify whether bad d e b t relief can be claimed in respect of the following amounts owed to Gertrude as at 31 March
2024.
Requirements
Wood Ltd still owes £5,000 from an invoice issued o n 3 0 June 2023. Gertrude still believes that the amount will b e paid i n
full and so it has not been written off i n the accounts.
A Bad debt relief can be claimed
B Bad debt relief cannot be claimed
Trees Ltd owes £2,000 from an invoice issued o n 15 September 2023. Gertrude does not expect payment of this debt and
has written it off i n the accounts.
C Bad debt relief can be claimed
D Bad debt relief cannot be clai med
LO6e
44 Identify whether each of the following statements is correct.
Requirements
A business making £48,000 of standard- rated supplies and £38,000 of exempt supplies is required to register for VAT.
A Correct
B Incorrect
A business making £86,000 of zero-rated supplies only does not have to become VAT registered.
C Correct
D Incorrect
LO 6c

45 Lancashire Ltd began trading o n 1 January 2023. The company's taxable turnover was £4,900 per month for the first six
months, rising to £7,700 per month for the next six months. In January 2024 the turnover increased to £14,400 per month.
Requirement
Lancashire Ltd must start to charge VAT o n its supplies from
A 31 January 2024
B 29 February 2024
C 1 March 2024
D 2 March 2024
LO 6c

46 Yorks Ltd began trading o n 1 January 2024, anticipating taxable turnover of £86,000 per month.

Requirements
It must notify HMRC of its liability to register for VAT by:
A 1 January 2024
B 30 January 2024
C 31 January 2024
The company's VAT registration is effective from:
D 1 January 2024
E 30 January 2024
F 31 January 2024
LO 6c

47 Maddie is registered for VAT and makes standard-rated supplies only. Maddie sold some goods to Julie for £76 without
charging any VAT because Maddie believed that the goods were exempt from VAT.
Maddie has now discovered that VAT should have been charged o n this sale.
How much VAT is payable on this sale and by whom?
Requirements
The amount of VAT payable is:
A £12.67
B £15.20
The VAT is payable by:
C Maddie
D Julie
LO 1d, 6e
48 Harry began trading o n 1 September 2023. His monthly turnover for the first 1 8 months of trade is as follows:

Per month
(excluding VAT)

Turnover £

Standard-rated supplies 4,600

Zero-rated supplies 1,900

Exempt supplies 500

6,000

O n 1 May 2024, Harry sold surplus office machinery for £3,500 (excluding VAT).
Select whether the following supplies should be included in order to determine when the VAT registration limit of £85,000
is first exceeded by Harry's business.
Exempt supplies:
A Include
B D o not include
Supply of surplus office machinery:
C Include
D D o not include
LO 6c

49 Skating Ltd is a VAT-registered company that only makes stand a rd -rated supplies.
Select the extent to which the input tax is recoverable o n the following VAT-inclusive costs incurred by Skating Ltd.

Requirements
£15,000 for the purchase of a new machine. The VAT invoice has been lost a n d cannot be replaced.
A Fully recoverable
B Partially recoverable
C Not recoverable
Purchase of a car for a salesman for £20,000. The car is used 60% for busi ness p u rposes.
D Fully recoverable
E Partially recoverable
F Not recoverable
LO 6e

5 0 Jack is a VAT-registered trader making only standard- rated supplies. Jack received an order from a customer o n 20
February 2024 and dispatched the goods o n the same day. Included with the order was payment of a 10% deposit of
£1,150 including VAT.
An invoice for the full amount of £1 1,500 including VAT was issued o n 1 March 2024. The balancing payment of £10,350
was received on 10 April 2024.
Assuming that Jack does not operate the cash accounting scheme, calculate how much output tax (to the nearest £1 ) must
be accounted for o n the following VAT returns:

Requirements
Quarter to 2 9 February 2024:
A £0
B £192
C £1,150
Quarter to 31 May 2024:
D £0
E £1,725
F £1,917
LO6e