Answer to Example 5 Input VAT can be reclaimed in respect of the cost of petrol and repairs.
Because fuel is being provided for private use to the director, Poppy plc will have to account for
output VAT based on the scale charge.
The quarterly cost is £74 (445
×
20/120)
Answer to Example 6 The late submission of the VAT return for the quarter ended 30 September 2021 will have resulted in
HMRC issuing a surcharge liability notice specifying a surcharge period running to 30 September
2022.
The late payment of VAT for the quarter ended 31 December 2021 will result in a surcharge of £426
(£21,300
×
2%).
The surcharge period will have been extended to 31 December 2022.
Bluebell Ltd then submitted four VAT returns on time.
The late submission of the VAT return for the quarter ended 31 March 2023 will therefore only result
in a surcharge liability notice (specifying a surcharge period running to 31 March 2024).
£ £ Output VAT (note 1) Sales (60,000 x 95% (100% - 5%) x 20%)
11,400
(60,000 x 20%)
12,000
Input VAT Purchases and expenses (35,640 - 480 = 35,160
×
20%) (note 2)
7,032
Irrecoverable debt (2,000
×
20%) (note 3)
400
Machinery (21,150
×
20/120) (note 4)
3,525
10,957
VAT payable
12,443
Due date ( see Section 5 of chapter)
7/5/23
