Partial exemption ― types of special method and sector specific information

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note looks at several of the most common ways that a partial exemption special method may operate in order to calculate recoverable VAT.

For special methods generally, see the Partial exemption special methods guidance note. For an overview of partial exemption more broadly, see the Partial exemption ― overview guidance note.

In depth commentary on legislation and case law can be found in De Voil Indirect Tax Service V3.462.

Type of special method ― Sectorised methods

Sometimes it will make sense to split a business into separate parts as there is not a single method which would fairly apportion residual input tax across all areas of the business.. Each different part or ‘sector’ then calculates its own residual recovery rate in a way that is appropriate for how residual costs are used in that sector. Such a method is commonly known as a ‘sectorised’ approach and can be fairly common as a special method.

Each sector in a sectorised method must reflect the following:

Continue reading

To read the full Guidance note, register for a free trial of Tolley+™

TAKE A FREE TRIAL

Popular Articles

Personal Tax

Taxation of dividend income

Taxation of dividend incomeIntroductionA dividend is a distribution of profit by a company to its shareholders.A dividend is not only a payment in cash. It can be the issue of new shares in exchange for forfeiting the right to a cash payment (a stock dividend). For more detail, see the Cash

14 Jul 2020 13:48 | Produced by Tolley Read more

Tax Returns

Personal Tax

Married couple’s allowance

Married couple’s allowanceThe married couple’s allowance (MCA) is only available if one of the two spouses or civil partners was born before 6 April 1935. This means that one member of the couple must be at least 89 years old on 5 April 2024 to qualify for an allowance in the 2023/24 tax year.There

14 Jul 2020 12:13 | Produced by Tolley Read more

Employment Tax

Subsistence expenses

Subsistence expensesIntroductionSubsistence is the amount incurred as a consequence of business travel. Typically it relates to accommodation and meal costs incurred. These amounts are allowed because they are associated with the necessary travel which is not to a permanent workplace. See the Travel

14 Jul 2020 13:43 | Produced by Tolley in association with Philip Rutherford Read more

��Ƶ