Question 5

Romanoff Ltd was incorporated on 1 April 2021 and commenced trading on 1 January 2022. The company voluntarily registered for VAT on 1 January 2022, preparing its first VAT return for the quarter ended 31 March 2022. Romanoff Lid's sales for the first 3 months of trading are shown below and are stated exclusive of VAT

Standard rated Zero rated

January 2022 24,800 30,100

February 2022 42,600 28,700

March 2022 58,300 22,700

TOTAL 125,700 81.500

PART A

Assuming Romanoff Ltd did not voluntarily register for VAT, from what date would the business have been required to compulsorily notify and register for VAT? Provide workings alongside your answer.

During the quarter ended 31 March 2022, Romanoff Ltd received standard rated invoices totaling 56,400 (inclusive of VAT) in respect of purchases and expenses. Prior to trading, the company purchased office equipment totalling 4,900 (exclusive of VAT) on 7 April 2021.

Required:

PART B

Taking into account all of the information above, calculate the amount of net output VAT that should be paid to HMRC in respect of the quarter ended 31 March 2022.

On 28 December 2021 Romanoff Ltd sold 5,000 1 ordinary shares in Barton plc for 24,500. Romanoff Ltd had originally purchased 8,000 shares in Barton plc on 8 September 2021 for 4,800. On 21 September 2021 Barton plc made a 1 for 4 bonus issue. The indexation factor from September 2021 to December 2021 is 0.008.

Required:

PART C

Calculate Romanoff Ltd.'s capital gain on the disposal of Barton plc shares. Clearly show the cost of the remaining shares in Barton plc.