Commentary

V7.202 Cash accounting scheme—partial exemption

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.202 Cash accounting scheme—partial exemption

Part V7 Tax planning | Commentary

V7.202 Cash accounting scheme—partial exemption

A business that makes both taxable and exempt supplies is classed as partially exempt. In most cases, this means that there is a restriction on input tax recovery based on the standard method of calculation for partial exemption – whereby taxable outputs are calculated as a proportion of total outputs, ie including exempt supplies to give an input tax recovery rate on general overheads.

For a business on the cash accounting scheme, the same principle of input tax restriction applies, but the outputs calculation under the standard method is based on payments received for taxable

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial