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 the full document

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

TAKE A FREE TRIAL NOW

Popular Articles

Corporation Tax

Non-trading deficits on loan relationships

Non-trading deficits on loan relationshipsOverview of non-trading deficits (NTDs)When a company’s debits on its non-trading loan relationships and derivative contracts in an accounting period exceed the credits on its non-trading loan relationships and derivative contracts in the same period (the

14 Jul 2020 12:17 | Produced by Tolley Read more

Personal Tax

Self assessment ― estimates and provisional figures

Self assessment ― estimates and provisional figuresIf the taxpayer does not have sufficient information to enable them to complete the tax return in the time allowed, they should include either a best estimate or a provisional figure. The taxpayer should not either leave a box blank or enter

14 Jul 2020 13:37 | Produced by Tolley Read more

Personal Tax

Maintenance payments

Maintenance paymentsMaintenance payments are payments made by a taxpayer to their former or separated spouse / civil partner for the maintenance of that person or their children. To obtain any tax relief for maintenance payments, one of the couple must have been born before 5 April 1935 and the

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

��Ƶ