Apportionment methods

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

  • Apportionment methods
  • Apportioning output tax
  • Apportioning input tax

Businesses may need to use an apportionment method to apportion output tax between supplies that have different VAT liabilities and a single price is charged for the supply. It may also be necessary to apportion the amount of input tax incurred, for example, between business and non-business supplies or taxable and exempt supplies, etc. This guidance note provides links to relevant guidance notes where more information can be found on the types of apportionment methods that could be used.

Apportioning output tax

According to HMRC, there are two basic methods that can be used to apportion output tax:

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