- Businesses making exempt supplies may qualify for partial VAT exemption
- Partially exempt businesses cannot claim all input tax
- Standard method commonly used for tax calculation with annual adjustment
- Businesses can opt for a Partial Exemption Special Method better suited to their activities
- Special method must be fair and reasonable and pre-approved by HMRC
- Special method calculations must be precise to two decimal places
- Criteria for a method being fair and reasonable include robustness, clarity, operability, auditability, and fairness
- Examples of special methods include sectors, time spent, headcount, transaction numbers, floor space, and cost accounting
- Application requires a proposal document, worked example, latest annual adjustment, and a declaration as per VAT Notice 706
- Additional documents may be needed as detailed in Appendix 2 of PN706
- Applications can be made online using a Government Gateway ID or a confirmation code sent to an email address
Source: marcusward.co
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
