On 25 March 2021 Rainy-day Ltd received a deposit for standard rated services to be supplied to a VAT registered customer on 31 March 2021. The customer paid the balancing payment on 31 March 2019. Rainy-day Ltd issued an invoice on 2 April 2021.
On 25 March 2021 Rainy-day Ltd received a deposit for standard rated services to be supplied to a VAT registered customer on 31 March 2021. The customer paid the balancing payment on 31 March 2019. Rainy-day Ltd issued an invoice on 2 April 2021.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 6RE: Smith Company is required to charge customers an 8% sales tax on all goods it sells. At the time of...
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Calculate the surcharge penalty that Rainy-day Ltd could be charged if it is late in submitting its VAT return and paying its VAT liability for the quarter ended 31 March 2021 using the following information:
- Invoices were issued for sales to VAT registered customers of £16,200 in respect of exempt sales, £5,650 in respect of reduced rate sales and £205,250 in respect of standard rated sales. The reduced rate and standard rated sales figures are exclusive of VAT.
- Invoices were issued for sales to Non-VAT registered customers of £32,350 in respect of exempt sales and £25,670 in respect of standard rated sales. The standard rated sales figure is inclusive of VAT.
- On 25 March 2021 Rainy-day Ltd received a deposit for standard rated services to be supplied to a VAT registered customer on 31 March 2021. The customer paid the balancing payment on 31 March 2019. Rainy-day Ltd issued an invoice on 2 April 2021.
- The sales manager of Rainy-day Ltd is provided with free fuel for both business and private mileage driven in his company motor car. Rainy-day Ltd paid £995 for fuel during the quarter of which 30% was in relation to private use. Abdulla Ltd wishes to use the fuel scale charge and the relevant quarterly scale charge is £385. Both figures are inclusive of VAT.
For the quarters ended 31 December 2019, 31 March 2020 and 30 September 2020 Rainy-day Ltd was late in submitting its VAT returns and in paying the related VAT liabilities. All of Rainy-day Ltd's other VAT returns have been submitted on time.
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