Sports Folks Ltd is a UK resident company. The company trades in sports goods and wears. All products are taxable unless stated otherwise. Sports Folks Ltd buys goods from local manufacturers for distribution in England and some other European Countries. Company prepares its accounts to 31 March each year. The statement of profit or loss prepared in accordance with the international financial reporting standards (IFRS) for the year ended 31 March 2020 is given below:

The tax written down value of Sports Folks Ltd’s main pool assets on 1 April 2019 was £1,340,500. Following assets were acquired and disposed of during the year to 31 March 2020:

Acquisitions:

5 May 2019 Purchased delivery trucks £342,000

10 July 2019 Purchased new motor car CO₂ emissions 45g/km 7,500

14 Sep 2019 Purchased motor car CO₂ emissions 100g/km 21,800

15 Dec 2019 Purchased equipment 18,400

Disposals:

10 Jan 2020 Sold a motor car CO₂ emissions 95 g/km 4,000

15 March 2020 Sold equipment 11,200

Original costs of motor car and equipment sold are £8,400 and £9,000 respectively.

Assume, Sports Folks Ltd has no special rate pool item. All acquisitions and disposals are subject to the standard rate of VAT.

The company’s VAT periods end on 30 June, 30 September, 31 December, and 31 March in a year. For the purpose of computing VAT liability, quarterly data of taxable expenses and supplies included in the statement of profit or loss is as follows.

Quarter	Standard rated	Zero-rated
	expenses & supplies	expenses & supplies
April 19-June 19	415,380	12,300
July 19-Sep 19	270,400	8,900
Oct 19-Dec 19	332,000	14,000
Jan 20-Mar 20	190,700	5,200
Total	1,208,480	40,400

task: Compute Sports Folks Ltd’s VAT liability for each quarter. Take into account all the taxable sales, purchases, and expenses as well as adjustments when computing output and input VAT for each quarter. Show all computations and/or give an explanation where possible.

Answer rating: 100% (QA)

ANSWERS Quarter Standard rated Zerorated expenses supplies expenses supplies April 19June 19 41... View the full answer