Partial exemption ― overview

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance provides an overview of the topic of partial exemption. Partial exemption is a core area for VAT purposes and one that a range of businesses may need to consider.

For an A to Z of key terms associated with partial exemption, see the A to Z of partial exemption guidance note.

For in-depth commentary on the legislation and case law on partial exemption, see De Voil Indirect Tax Service V3.460.

A video overview of partial exemption can be found below:

•
Partial exemption (A)
•
Partial exemption (B)
•
Partial exemption (C)

What is partial exemption?

A business that makes both taxable and exempt supplies is partially exempt. Broadly, VAT on costs related (or ‘attributable’) to taxable supplies is recoverable whilst VAT incurred on costs related to exempt supplies is irrecoverable (subject to some de minimis rules for negligible amount of exempt input tax). Partial exemption methods exist so that businesses can apportion their input tax between costs used for taxable activities (where VAT is recoverable) and costs used for exempt activities

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Owner-Managed Businesses

Allowable expenses for property businesses

Allowable expenses for property businessesGeneral itemsMany of the principles applying to allowable expenses for property businesses are similar to those that apply for trading and the rules for individuals in a property business are generally the same as for companies with some exceptions which are

14 Jul 2020 13:26 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax Read more

Tax Returns

Owner-Managed Businesses

Definition of a close company

Definition of a close companyThe detailed definition of a close company is set out below, but in summary the rules are targeted at those companies where the owners can manipulate the activities of the company to influence their own tax position. Therefore, broadly speaking, in most cases an

14 Jul 2020 11:24 | Produced by Tolley Read more

Class 1 v Class 1A

Class 1 v Class 1AClass 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met

UU��ֱ��