Question 1

Section B: Case 1 - QuantumLeap VR Ltd

Scenario: QuantumLeap VR Ltd is a virtual reality software developer. The company began trading on 1 January 2023. Its taxable turnover was £6,000 per month for the first 10 months. In November 2023, it secured a major contract, and taxable turnover jumped to £30,000 for November and £30,000 for December.

Question: By what date must QuantumLeap VR Ltd notify HMRC of its liability to register for VAT?

Accepted Answer

Calculate cumulative turnover at the end of each month. Jan-Oct (10 months) = £60,000. End of Nov = £60,000 + £30,000 = £90,000. The £85,000 threshold is breached at the end of November 2023. Notification is due within 30 days of the end of the month in which the threshold is exceeded.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Waiting until the end of the year to check the threshold, or confusing the notification date with the registration date.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 5

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