On 6 April 2021, John commenced in self-employment, running a pub in Exeter city centre. John’s sales since the commencement of trading have been as follows: April to July 2021 £10,500 per month August to November 2021 £15,000 per month December 2021 to March 2022 £21,500 per months These figures are stated exclusive of Value added tax (VAT). Ricard’s sales are all standard rated. As a trainee Chartered Certified accountant you have advised John in writing that he should be registered for VAT, but he has refused to register because he thinks his net profit is insufficient to cover the additional cost which would be incurred. Required 1- Explain from what date Richard was required to be compulsorily registered for VAT and the VAT implications of continuing to trade after this date without registering. Note. You are not expected to explain the VAT penalties arising from late VAT registration 2- Explain from an ethical viewpoint the issues you, as a trainee Chartered Certified accountant and subject to the Professional Code of Conduct, should consider, in order for your firm to deal with Richard’s refusal to register for VAT. 3 State and discuss the circumstances in which a trader can issue a simplified (or less detailed) VAT invoice, when such an invoice should be issued, and FIVE pieces of information which such an invoice must show where the supply is entirely standard rated.
On 6 April 2021, John commenced in self-employment, running a pub in Exeter city centre. John’s sales since the commencement of trading have been as follows: April to July 2021 £10,500 per month August to November 2021 £15,000 per month December 2021 to March 2022 £21,500 per months These figures are stated exclusive of Value added tax (VAT). Ricard’s sales are all standard rated. As a trainee Chartered Certified accountant you have advised John in writing that he should be registered for VAT, but he has refused to register because he thinks his net profit is insufficient to cover the additional cost which would be incurred.
Required 1- Explain from what date Richard was required to be compulsorily registered for VAT and the VAT implications of continuing to trade after this date without registering. Note. You are not expected to explain the VAT penalties arising from late VAT registration
2- Explain from an ethical viewpoint the issues you, as a trainee Chartered Certified accountant and subject to the Professional Code of Conduct, should consider, in order for your firm to deal with Richard’s refusal to register for VAT.
3 State and discuss the circumstances in which a trader can issue a simplified (or less detailed) VAT invoice, when such an invoice should be issued, and FIVE pieces of information which such an invoice must show where the supply is entirely standard rated.
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