Commentary

V7.350 Partial exemption—incidental transactions

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.350 Partial exemption—incidental transactions

Part V7 Tax planning | Commentary

V7.350 Partial exemption—incidental transactions

When applying the standard method of calculation, it is important to be clear about the sources of income that are excluded from the figures – as well as those that are included. The aim of the calculation process is that the percentage of residual input tax that is reclaimed by the business should be 'fair and reasonable', ie an amount that reflects the level of taxable supplies made by the business.

The following sources of income should be excluded as being incidental transactions:

  1.  

    •     sale of capital assets, eg sale of car, plant and machinery etc

  2.  

    •    

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