VAT Quiz On Buying And Selling Goods In The UK, Eu And Overseas

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Quizzes Created: 3 | Total Attempts: 3,200

Questions: 9 | Attempts: 223 | Updated: Mar 18, 2023

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VAT Quiz On Buying And Selling Goods In The UK, Eu And Overseas - Quiz

This VAT Quiz tests understanding of VAT rules for UK businesses engaging in transactions within the EU and overseas. It covers scenarios like despatches, exports, and VAT charges, essential for compliance and financial planning in business.

Questions and Answers

1.

Explain the process of how a UK VAT registered trader must account for VAT on goods bought from a VAT registered EU trader
2.

When a UK business sells goods to another EU business this is called a

Explanation
When a UK business sells goods to another EU business, this is referred to as "despatch." Despatch is a term used to describe the process of sending or delivering goods from one place to another. In this context, it signifies the movement of goods from the UK to an EU country as part of a business transaction.

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3.

A UK business which sells goods to a non-EU business has made an

Explanation
The correct answer is "Export". In this scenario, a UK business is selling goods to a non-EU business. When a business sells goods to a buyer located outside of its home country, it is considered an export. In this case, since the buyer is located outside of the EU, it qualifies as an export transaction.

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4.

When a UK VAT registered business sells goods to a EU VAT registered business, it must charge VAT at

Explanation
When a UK VAT registered business sells goods to an EU VAT registered business, it must charge VAT at zero rate or 0%. This means that no VAT is added to the price of the goods. This is because the sale is considered an export, and exports are generally zero-rated for VAT purposes. The zero rate allows for the free movement of goods within the EU and promotes trade between member states by eliminating the burden of VAT on cross-border transactions.

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5.

When a non-VAT registered UK trader sells goods to a EU VAT registered trader it must charge VAT
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
If a trader is not VAT registered it cannot charge VAT

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6.

When a UK Business sells goods to a non-EU country it must charge
- A.
  
  20% VAT
- B.
  
  5% VAT
- C.
  
  0% VAT
- D.
  
  These are exempt sales
Correct Answer
C. 0% VAT

Explanation
Always zero rated because VAT is a tax on goods used in the UK.

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7.

When a UK VAT registered trader sells goods to a non-VAT registered EU trader it should not charge VAT
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
The trader must always charge VAT in this scenario

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8.

When a UK VAT registered trader buys goods from a non-EU trader, the non-EU trader charges VAT
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
No VAT is charged by the trader. The UK trader has to pay the correct UK VAT rate when the goods arrive at the airport or port. They can reclaim this input VAT on their VAT return

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1
9.

When a UK VAT registered trader buys goods from a EU non-registered trader they should add the appropriate rate of UK VAT to the cost of the purchase
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
There would be no VAT in this scenario as the trader is not VAT registered and cannot charge VAT

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Current Version
Mar 18, 2023

Quiz Edited by
ProProfs Editorial Team
Nov 20, 2016

Quiz Created by
MiffBiz

VAT Quiz On Buying And Selling Goods In The UK, Eu And Overseas

Explain the process of how a UK VAT registered trader must account for VAT on goods bought from a VAT registered EU trader

When a UK business sells goods to another EU business this is called a

A UK business which sells goods to a non-EU business has made an

When a UK VAT registered business sells goods to a EU VAT registered business, it must charge VAT at

When a non-VAT registered UK trader sells goods to a EU VAT registered trader it must charge VAT

When a UK Business sells goods to a non-EU country it must charge

When a UK VAT registered trader sells goods to a non-VAT registered EU trader it should not charge VAT

When a UK VAT registered trader buys goods from a non-EU trader, the non-EU trader charges VAT

When a UK VAT registered trader buys goods from a EU non-registered trader they should add the appropriate rate of UK VAT to the cost of the purchase