SQE1 sample questions

Question 72

A new firm of solicitors is voluntarily registered for Value Added Tax (VAT) and makes only standard-rated supplies. During the relevant VAT period it charges output tax of £10,000 on its services and it pays input tax of £20,000 on goods it buys for the purposes of its business and on its heating bills.

Which of the following statements best describes the firm’s position at the end of the relevant VAT period?

A. The firm does not have to pay any VAT and cannot reclaim any VAT.

B. The firm can reclaim £10,000 VAT.

C. The firm can reclaim £20,000 VAT.

D. The firm must pay £10,000 VAT.

E. The firm must pay £20,000 VAT.


B - The firm can reclaim £10,000 VAT.


 

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