Indirect TAX Question in EXAM?????

mazinynyb

Dear All,

Below this is Question and I want answer and why ....:

A retail business that receives most of its sale in cash and buys most of its purchase on credit has and estimated turnover for the next 12 months of 1,400,000 pound.

(a) What is the turnover limit for eligibility to join the cash accounting scheme? Choose ONE answer.
- Estimated turnover in the next 12 months not more than 1,350,000 pound
- Estimated turnover in the next 12 months not more than 1,600,000 pound
(b) Is the business eligible to join the cash accounting scheme? Choose ONE answer?

- Yes
- No
(c) Would the cash accounting scheme improve the cash flow of this business? Choose ONE answer?
- Yes, because if would be able to reclaim VAT earlier.
- Yes, because if would pay output VAT later.
- No, because if would reclaim input VAT later.
- No, because if would pay output VAT earlier.


I wait your answer...

Regards

liveprincess

Hi the answer to first question you will find in the reference material available in the exam. I don't have it right now so I won't answer because I could be wrong. Once you know this it will answer your second question. With regards to third question the answer is No, because if would reclaim input VAT later

Kelly7

Hi
To join the cash accounting scheme your turnover cannot be more than £1,350,000 so b is no.