Question
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
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%
- Required: Compute the VAT payable for the quarter.
[14 Marks]
- 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]
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