Partital vat exemption

mem10 Registered Posts: 7 Regular contributor ⭐ 😼 ⭐
Hi Just wondered if anybody has had to deal with this before as it has just reared its ugly head!! Is it as complicated as it seems (the problem goes back 4 years to make matters worse!!)


  • slackda
    slackda Registered Posts: 460
    can you provide some more info surrounding the issue?
  • Thomasl1
    Thomasl1 Registered Posts: 43 💫 🐯 💫
    The company I work for is Partially Exempt for VAT. What would you like to know about it?
  • Vonni
    Vonni Registered Posts: 63 💫 🐯 💫
    Seriously it's not as complicated as it would appear. I deal with 2 businesses where there is partial exemption, a dispensing doctors and a business where there is franchising (standard rated) and exempt income. The principal remains the same you need to analyse the turnover between zero/standard rated and exempt to work out the percentage of disallowable input tax to apply bearing in mind the de-minimis limit. You can use this percentage for a full year and review and adjust annually.

    The Revenue website has information which is useful and worth looking at.

    Good Luck
  • mem10
    mem10 Registered Posts: 7 Regular contributor ⭐ 😼 ⭐
    Its for a charity thats also a limited company and is divided in "trading" and "non-trading" departments and also has exempt income as will as normal trading income, the problem arises because each of the "trading" departments is also carrying out the charitable aimes that money is being raised for. I understand the basics of it but am just concerned its going to be a nightmare to put into practise as normal overheads and costs have to be split deaprtments but i will now have to added complication of the partial exemption. I'm sure i will soon get my head around it !!
  • Poodle
    Poodle Registered Posts: 711

    By understanding the basics of PE you will realise that the most important aspect of PE is identifying which input VAT relates to which output VAT, if you allocate everything as you go then the quarterly and annual calculations will be easy. Departmental allocation is irrelevant, unless you need to allocate irrecoverable VAT on a departmental basis.

    The following publication should be your bible for this and you may like to order a free hard copy as opposed to the electronic version

    It is vital before you post anything that set up your accounting software correctly to enable the analysis of input VAT as you post. That way when you come to calculating your percentages you will have all of the figures that you need to hand.

    I have used Sage on several occasions for this and also for a large charitable organisation and so if you use Sage and would like to PM me I could let you have some more detailed help.

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