Commentary

V7.360 Partial exemption special method applications post 1 April 2007

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.360 Partial exemption special method applications post 1 April 2007

Part V7 Tax planning | Commentary

V7.360 Partial exemption special method applications post 1 April 2007

A special method application can appear to be based on a fair and reasonable proposal but contain a clause or section that distorts the overall result. This distortion may not be identified by HMRC at the time that the proposal is made, giving the taxpayer a very good outcome in terms of input tax recovery. It is probable that an officer will identify the distorted result on the next VAT visit but until 1 April 2007, he only had the power to revise the method from a current, rather than historic, date.

An important change was introduced on 1 April 2007 – any special method application now requires the taxpayer

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