A firm which sells goods, all of which are exempt from VAT . . .
Select ONE answer:
- A cannot be charged VAT by any of its suppliers.
- cannot be charged VAT by those who supply services to it.
- is charged VAT by its suppliers, but may reclaim all of this VAT from HMRC.
- is charged VAT by its suppliers and cannot recover all of this VAT from HMRC.
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 4
- Incorrect – The firm will be charged VAT on the purchase of goods, services and other items which are not exempt or zero-rated.
- Incorrect – The firm will be charged VAT on the purchase of services which are not exempt or zero-rated.
- Incorrect – Firms selling goods which are exempt from VAT cannot reclaim VAT paid by them on purchases.
- Correct
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