Partial exemption (VAT Notice 706)
Find out about partial exemption and the methods and calculations to use to see how much input tax you can recover.
Official website: gov.uk00
How to use the service
There are 3 main steps to calculating how much input tax you can recover. These are: step 1 — direct attribution of input tax step 2 — apportionment of residual input tax step 3 — completion of an annual adjustment Steps 1 and 2 must usually be carried out for each VAT Return with step 3 undertaken at the end of each longer period, see section 4 and section 11 for circumstances where different rules apply. Also see paragraph 12.3 for more information on longer periods.
Requirements
When you’re registered for VAT you’re required by law to keep the records and accounts specified in VAT guide (VAT Notice 700) . For partial exemption purposes your records must also enable you to work out the amount of input tax you can recover in each tax period and in each tax year (see paragraph 12.2). You must also keep any other records that you use to calculate your recoverable input tax.
Official source
Partial exemption (VAT Notice 706)
retrieved: