VAT Partial Exemption
Any businesses which receive exempt income are ‘partly exempt’ for VAT purposes. All businesses should therefore consider the following:-
- VAT is a ‘by exception tax’. Businesses should ensure that the conditions of any VAT exemption sought are realised, so that income is correctly exempted.
- Businesses with VAT-exempt income should examine VAT incurred on costs and attribute correctly to establish whether ‘exempt input tax’ is above the de-minimis limit.
- If above the de-minimis limit, businesses should examine whether the standard method is the most beneficial method for calculating the recoverable proportion of overhead costs.
Any partly exempt business should be proactive in both the basics detailed above, and in determining whether an alternative method of VAT recovery would improve their VAT position.
Our experience in assisting businesses to maximise VAT recovery may save you tax, so contact us to establish how we can help you by emailing enquiries@avantigroup.uk.com