William Collins is a VAT registered sole trader who uses standard quarterly VAT accounting. The following is
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Question:
William Collins is a VAT registered sole trader who uses standard quarterly VAT accounting. The following is a summary of his business’s sales and revenue expenditure for his VAT quarter ending 31st March 2021.
Where appropriate the figures are inclusive of VAT at either 20% (standard rate) or 5% (reduced rate).
- Standard rate sales £33,600
- Reduced rate sales £630
- Zero rate sales £2,900
- Standard rate expenditure (see note 1) £19,260
Notes
- The figure for standard rate expenditure includes £540 (inclusive of 20% VAT) leasing costs for a car (which has both private and business use).
- On 31st March 2021 William Collins wrote off a bad debt relating to a £500 sale (excluding VAT) he had made in August 2020 and which had originally been included in his VAT return the quarter ending 30th September 2020. The due payment date of this sale was 25th September 2020.
- Not included in the above summary is £2,400 (inclusive of 20% VAT) of capital expenditure on computer equipment (which was received on 15th March 2021). The equipment was purchased on 30 day credit terms and had not been paid for as at 31st March 2021. The computer will be used 30% of the time for private use.
Requirements:-
Calculate the total amount of VAT William Collins must pay HMRC relating to this VAT quarter. Your calculations should be clearly presented in a table with brief workings, and explanations where appropriate.
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