D1 You have received a letter from the managing director of Wakem & Co. Ltd, a company making wholly standard rated supplies. Extracts from the letter are as follows:

"During the course of the last quarter, sales have been very good. In particular, we sold

£30,000 worth of goods to St. Oggs Inc, an American company, and we also sold

£20,000 worth of goods to Rappit Ltd in Scotland. Mr Jakin, the managing director of Rappit Ltd, drove a hard bargain and to secure the order we had to allow a 5% discount for prompt settlement. As we closed down the box manufacturing line, we sold off the machinery and made a useful £15,000. The electrical equipment remaining has been hired to Mudport Ltd for £1,000 per month. One piece of bad news is that Garum Furs plc has gone into liquidation owing us £14,000, though there is a possibility of recovering part of that amount in the liquidation."

Required:

Explain the significance for VAT purposes of the events described in this letter.