ACCA Advanced Taxation (ATX) Practice Exam

When is the typical due date for the VAT return and payment?

1. Within 2 months after the end of the period

2. Within 1 month and 7 days of the end of the return period

3. At the end of the financial year only

4. There is no standard due date

The correct answer is: Within 1 month and 7 days of the end of the return period

The typical due date for the VAT return and payment is set at one month and seven days following the end of the return period. This timeframe allows businesses to complete their VAT returns after accounting for their sales and purchases during the specified period. This structure is designed to provide a clear and consistent deadline for businesses, which enables them to manage their cash flows effectively and ensures compliance with VAT regulations. In the context of other options, the first choice suggests a longer period of two months, which does not align with standard practices in VAT submission. The third option, which states that the return and payment are only due at the end of the financial year, is misleading because VAT is typically accounted for on a periodic basis rather than annually. Lastly, the idea that there is no standard due date is inaccurate, as tax authorities require timely submissions within established timelines to maintain clarity and order in tax collection processes. Therefore, the specified period of one month and seven days is critical for ensuring proper compliance with VAT laws.