Commentary

V7.355 Partial exemption—planning points to consider

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.355 Partial exemption—planning points to consider

Part V7 Tax planning | Commentary

V7.355 Partial exemption—planning points to consider

The following planning points should be given consideration.

  1.  

    •     An accurate partial exemption calculation can only be made if an accountant (or relevant staff) clearly identifies whether an expense should be coded as taxable, exempt or residual as far as input tax recovery is concerned. A major invoice incorrectly coded as residual instead of taxable (or exempt instead of residual or taxable) could cost a business a lot of money.

  2.  

    •     Most businesses use the standard method of calculation. However, be aware that a special method can be applied for (as long as HMRC approval is obtained) if the standard method does not give a fair and

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