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Question 1a Note 3
Garfield has been registered for valued added tax (VAT) since 1 April 2008. Garfield has previously completed his VAT returns himself, but for the quarter ended 31 March 2015 there are some items for which he is unsure of the correct VAT treatment.
Garfield’s partly completed VAT computation for the quarter ended 31 March 2015 is shown below. All of the completed sections of the computation are correct, with the omissions marked as outstanding (O/S).
| Note | £ | |
|---|---|---|
| Output VAT | ||
| Sales (all standard rated) | 22,500 | |
| Discounted sale | 1 | O/S |
| Equipment | 2 | O/S |
| Fuel scale charge | 60 | |
| Input VAT | ||
| Purchases (all standard rated) | (11,200) | |
| Motor car (purchased on 1 January 2015) | 0 | |
| Equipment | 2 | O/S |
| Impairment losses | 3 | O/S |
| Entertaining – UK customers | 0 | |
| – Overseas customers | 4 | O/S |
| Motor expenses | 5 | O/S |
| VAT payable | O/S |
Note 3 – Impairment losses
On 31 March 2015, Garfield wrote off three impairment losses. Details are as follows:
| Amount | Invoice date | Payment due date |
|---|---|---|
| £1,400 | 30 July 2014 | 29 August 2014 |
| £2,700 | 12 September 2014 | 12 October 2014 |
| £1,900 | 4 October 2014 | 3 November 2014 |
Required:
Calculate VAT payable by Garfield relating to Note 3 only for the quarter ended 31 March 2015.