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A to Z of partial exemption

Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance

A to Z of partial exemption

Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
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There is often a significant volume of technical terminology that is use when discussing partial exemption. The table below provides brief explanations of some of the key terms associated with partial exemption and, where appropriate, links to guidance notes containing further details.

TermDefinitionFurther details
AllocationVAT incurred on purchases is distributed or allocated to a specific sector within a special partial exemption methodPartial exemption ― types of special method and sector specific information
Annual AdjustmentBusinesses provisionally reclaim VAT on each VAT return calculated using the partial exemption method. At the end of the tax year, a partial exemption calculation is undertaken using all of the figures for the whole tax yearPartial exemption ― annual adjustments (longer period adjustments)
ApportionmentThe partial exemption calculation is intended to split the residual input tax between taxable and exempt supplies. The residual input tax will be apportioned between

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