Partial exemption glossary

By Tolley
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The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Partial exemption glossary
  • Glossary

The table below provides a definition of commonly used partial exemption terminology.

Glossary
TermDefinition
AllocationVAT incurred on purchases is distributed or allocated to a specific sector within a special partial exemption method
Annual AdjustmentBusinesses provisionally reclaim VAT on each VAT return calculated using the partial exemption method. At the end of the tax year, a partial exemption calculation is undertaken using all of the figures for the whole tax year.
ApportionmentThe partial exemption calculation is intended to split the residual input tax between taxable and exempt su

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