Commentary

V7.348 Partial exemption—standard method override

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.348 Partial exemption—standard method override

Part V7 Tax planning | Commentary

V7.348 Partial exemption—standard method override

In most cases, the standard method gives a fair and reasonable result. However, in some very rare cases (which in general only apply to large businesses) the standard method gives an unfair input tax recovery rate.

To combat this situation, HMRC introduced override provisions with effect from 18 April 2002 to address these difficulties. Except in cases of deliberate abuse (eg through complex VAT planning schemes), the application of the override provisions is very limited. As a general principle, the override provisions could be used if the standard method gives a level of input tax recovery

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