PE exercises

KEY POINTS

Partial exemption – the basic principles.

De minimis rules – the old and the new.

Worked examples of the rules in practice.

Don’t forget the annual comparison.

Can input tax recovery be improved?

Partial exemption is one of the most complex aspects of VAT; but there is good news to report: in Revenue & Customs Brief 10/10 and VAT Information Sheet 04/10 HMRC have introduced some important concessions to make life easier for smaller entities faced with the challenges of this topic.

The latest changes came in to play on 1 April 2010 with the addition of two new de minimis tests and some other simplification measures that could make life easier for a small business.

But equally importantly the new measures also offer the carrot of VAT savings in certain situations...