BB/27D/03 VAT—partial exemption: Special Method Override Notice
Business Brief, Iissue 27. 10 December 2003
This Business Brief article describes the effect of the Special Method Override Notice announced in today's pre-Budget report and which comes into force from 1 January 2004.
The Special Method Override Notice (Notice) only affects partly exempt businesses that operate a partial exemption special method and where Customs have—
— served a Notice on the business; or,
— approved a Notice served by the business.
A Notice allows Customs or business to correct the results of an unfair special method until a replacement method is implemented.
No other businesses are affected by this measure.
A business that makes both taxable and exempt supplies is known as partly exempt and must apply a partial exemption method to calculate how much of the VAT it incurs on its costs and purchases it can deduct. A