Commentary

V7.346 Partial exemption—annual adjustment

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.346 Partial exemption—annual adjustment

Part V7 Tax planning | Commentary

V7.346 Partial exemption—annual adjustment

Many businesses have seasonal variations in their trading levels – or periods when the exempt or taxable income can be artificially high.

Consider the situation of the non-profit making golf club in Example 3. It is likely that all of its exempt membership receipts will be received in one VAT period (date when annual fees are due for renewal) and this will create an exceptionally high percentage of exempt sales in this one period. If the club has a very high residual input tax figure in this period, then the percentage recovery will be very low because of

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