You are the Tax Consultant for All-Is-Well Limited. Your clients business is waste management, and they deal with many large-scale enterprises in Central London. The information below relates to All-Is-Wells fourth quarter 2019 VAT returns. The information has been compiled by one of the Clerks at the Tax Department. All the figures are ex-VAT.

Standard rated sales Note 1 1,035,205

Zero rated sales 235,500

1,270,205

Purchases Note 2 674,885

Bad debts written off Note 3 10,800

Entertainment expenses Note 4 70,000

Salaries 105,400 (861,085)

Profit 409,120

Note 1 Standard rated sales

Sales discount of 100,000 was given to customers. This has not been accounted for in the figures reported.

Note 2 Purchases

All purchases are standard rated.

Note 2 Bad debt

Three quarters (50%) of the bad debts figure is more than 6 months old.

Note 3

Entertainment expenses are standard rated and distributed as follows:

Employees 70%

Customers 20%

Suppliers 10%

1. Required: Compute the VAT payable for the quarter.

[14 Marks]

2. The Tax Clerk has asked you to explain the difference between tax avoidance tax evasion and money laundering. Write a brief Memo to explain the above concepts with some examples.

[11 Marks]