The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of the use of partial exemption special methods in order to calculate the amount of recoverable residual input tax.
Where a business does not believe that the standard method described in the Partial exemption standard method guidance note is a fair way for apportioning its input tax, it may seek to agree a special method with HMRC. A special method is any other method than the standard method.
A special method needs to be approved in writing by HMRC before it can be used by a partly exempt business to calculate the amount of recoverable input tax. Special methods can be unique to a business and designed to deal with its particular type of activity or set of activities.
Since 1 January 2011, it has been possible to use a combined special method which deals not only with partial exemption but also with apportionment of VAT incurred in relation to business and non-business activities.
The following provide examples of when a business may need to use a special method:
Businesses wishing to start using a special partial exemption method, or change their existing partial exemption method, must obtain approval from HMRC. The business should contact HMRC providing a full explanation of how the proposed method will
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