Question 1

Section A

Chloe, a freelance drone operator, registered for VAT on 1 April 2023 and immediately joined the Flat Rate Scheme. Her sector's flat rate percentage is 12%. In her first quarter to 30 June 2023, her VAT inclusive turnover was £15,000.

How much VAT must Chloe pay to HMRC for this quarter?

Accepted Answer

Apply the 1% discount to the flat rate percentage for the first year of registration. Multiply the VAT-inclusive turnover by this reduced percentage.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Forgetting the 1% first-year discount or applying the percentage to the VAT-exclusive turnover.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 3

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