VAT Quiz On Buying And Selling Goods In The UK, Eu And Overseas

1. When a non-VAT registered UK trader sells goods to a EU VAT registered trader it must charge VAT

True

False

If a trader is not VAT registered it cannot charge VAT

Explanation

If a trader is not VAT registered it cannot charge VAT

2. When a UK VAT registered trader buys goods from a non-EU trader, the non-EU trader charges VAT

True

False

No VAT is charged by the trader. The UK trader has to pay the correct UK VAT rate when the goods arrive at the airport or port. They can reclaim this input VAT on their VAT return

Explanation

No VAT is charged by the trader. The UK trader has to pay the correct UK VAT rate when the goods arrive at the airport or port. They can reclaim this input VAT on their VAT return

3. A UK business which sells goods to a non-EU business has made an

The correct answer is "Export". In this scenario, a UK business is selling goods to a non-EU business. When a business sells goods to a buyer located outside of its home country, it is considered an export. In this case, since the buyer is located outside of the EU, it qualifies as an export transaction.

Explanation

The correct answer is "Export". In this scenario, a UK business is selling goods to a non-EU business. When a business sells goods to a buyer located outside of its home country, it is considered an export. In this case, since the buyer is located outside of the EU, it qualifies as an export transaction.

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4. When a UK VAT registered trader buys goods from a EU non-registered trader they should add the appropriate rate of UK VAT to the cost of the purchase

True

False

There would be no VAT in this scenario as the trader is not VAT registered and cannot charge VAT

Explanation

There would be no VAT in this scenario as the trader is not VAT registered and cannot charge VAT

5. When a UK Business sells goods to a non-EU country it must charge

20% VAT

5% VAT

0% VAT

These are exempt sales

Always zero rated because VAT is a tax on goods used in the UK.

Explanation

Always zero rated because VAT is a tax on goods used in the UK.

6. When a UK VAT registered trader sells goods to a non-VAT registered EU trader it should not charge VAT

True

False

The trader must always charge VAT in this scenario

Explanation

The trader must always charge VAT in this scenario

7. When a UK VAT registered business sells goods to a EU VAT registered business, it must charge VAT at

When a UK VAT registered business sells goods to an EU VAT registered business, it must charge VAT at zero rate or 0%. This means that no VAT is added to the price of the goods. This is because the sale is considered an export, and exports are generally zero-rated for VAT purposes. The zero rate allows for the free movement of goods within the EU and promotes trade between member states by eliminating the burden of VAT on cross-border transactions.

Explanation

When a UK VAT registered business sells goods to an EU VAT registered business, it must charge VAT at zero rate or 0%. This means that no VAT is added to the price of the goods. This is because the sale is considered an export, and exports are generally zero-rated for VAT purposes. The zero rate allows for the free movement of goods within the EU and promotes trade between member states by eliminating the burden of VAT on cross-border transactions.

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8. When a UK business sells goods to another EU business this is called a

When a UK business sells goods to another EU business, this is referred to as "despatch." Despatch is a term used to describe the process of sending or delivering goods from one place to another. In this context, it signifies the movement of goods from the UK to an EU country as part of a business transaction.

Explanation

When a UK business sells goods to another EU business, this is referred to as "despatch." Despatch is a term used to describe the process of sending or delivering goods from one place to another. In this context, it signifies the movement of goods from the UK to an EU country as part of a business transaction.

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