Tx notes fa22 Final

Calculate the VAT payable for the quarter ended 31 March 2023. 
3.2.
 
The refund of VAT 
The refund of VAT that has been overpaid is subject to a four-year time limit.

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4. Motor Expenses 
(a)
Input VAT can be recovered where fuel is used for private mileage (either by a sole trader or an 
employee), but output VAT must be accounted for. Output VAT is calculated according to a 
scale charge based on the cars CO2 emissions.
Note:
The scale charge, which is VAT inclusive, will be given to you in the examination. 
(b)
Provided there is some business use, input VAT can be fully recovered in respect of repairs to a 
motor car.
 
Example 5
 
 
Poppy Plc is to provide one of its directors with a company motor car which will be used for both 
business and private mileage.
The company will pay for all the running costs of the motor car, including petrol and repairs. The 
relevant quarterly scale charge is £445 for quarter to 31 March 2023 based on the cars CO
2
emission 
rating.
State the VAT treatment of the cost of petrol and repairs for the quarter to 31 March 2023. 
5. VAT Returns 
(a)
VAT returns are normally completed on a quarterly basis. 
(b)
Each return shows the total output VAT and total input VAT for the quarter to which it relates. 
All businesses are now required to file VAT returns and make VAT payments online. VAT returns 
must be filed online and electronic payment made by one month and seven days after the end 
of the VAT return period.
(c)
For example for the quarter ended 30 June 2023 a business has until 7 August 2023 to file its 
VAT return online and electronically make its VAT payment.
(d)
Following the introduction of making tax digital, most VAT registered businesses now have to 
use making tax digital software to directly submit their VAT returns to HMRC. and also keep 
digital records. These requirements do not apply to businesses with a turnover below the VAT 
registration threshold of £85,000 but which have voluntarily registered for VAT. 
Illustration 3
For the quarter ended 31 March 2023 Buttercup Ltd had output VAT of £12,400 and input VAT of 
£7,100. 
Buttercup Ltd’s VAT return for the quarter ended 31 March 2023 should be submitted by 7 May 
2023. VAT of £5,300 (£12,400 - £7,100) is payable, and this is due to be paid by 7 May 2023 when 
the VAT return is submitted.

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