Question 4: (5 points): A1,B1, C1

Fernando is a trader he purchases inventory at cost of 50,500 (inc. VAT) and incurs the expense of 8,000 (Inc. VAT) and sells the inventory for 95,000 (Excl.VAT).

Required:

(a) If it standard rate (20%) How much the trader will pay to HMRC or the HMRC will pay for him ? (2.5 points)

(b) If it Zero rat (0%). How much the trader will pay for HMRC or HMRC will pay to Fernando ? (2.5 points)