Financial Skills: Tax: VAT: Partial Exemption

Course Overview

This course explores the partial exemption rules in detail including the complexities of cost attribution, the standard method of apportionment and special methods. As well as an in-depth analysis of statute law, it will examine how case law has fashioned policy and practice.

The course is intended for those who prepare or are responsible for the VAT return of a partly exempt organisation as well as their advisers. A sound grasp of the basic rules of VAT is assumed

Course Outline

PARTIAL EXEMPTION IN OUTLINE

• What is partial exemption?
• Which businesses are partly exempt?
• De minimis limits
• The basis of the right to recover input tax -direct attribution and apportionment
• The effect of grouping
• Standard and special methods of apportionment

SOME POINTS ON DIRECT ATTRIBUTION

• The importance of identifying how goods and services are 'used'
• When incidental use can be ignored
• The rules when the use turns out to be not that originally expected

THE STANDARD METHOD OF APPORTIONING NON-ATTRIBUTABLE INPUT TAX

• How the method works
• Advantages and disadvantages of using it
• Outputs which must be excluded
• The meaning of 'incidental'
• Supplies made outside the UK
• The standard method override

SPECIAL METHODS OF APPORTIONMENT

• Negotiating techniques and obtaining HMRC approval
• Examples of special methods
• Changes of circumstances
• Arguments about use of special methods
• Special method override notices

THE CAPITAL ITEMS SCHEME

• Items included in the scheme
• How the scheme works
• Disposal of capital items
• Interaction with partial exemption calculations

Financial Skills: Tax: VAT: Partial Exemption / CM9675