VAT Partial Exemption & De Minimis
A business maybe partly exempt for VAT if it makes both taxable and exempt supplies and incurs tax on costs which relate to both. Industries such as health care, insurance and education may fall under this category.
If you are VAT-registered and fall under this you may be clarified as partially exempt for VAT. If so you may have to apply particular rules or even de-minimis calculations. Shires is experienced in dealing in VAT partial exemption and de minimis methods of VAT, and we have many clients who are required to apply this method to their VAT returns.
If a business can show that they have paid only a relatively small amount of input tax on their purchases that relate to the exempt sales or other supplies they may be able to reclaim all of that input tax. We can ensure you apply the rules correctly and your business is acting to HMRC standards.