Module 13: Further Aspects of VAT Flashcards
Calculating input tax recoverable - Step 1
Directly attribute input tax to taxable and exempt supplies as far as possible
Calculating input tax recoverable - Step 2
Calculate VAT recovery percentage
Calculating input tax recoverable - step 3
Use the percentage to apportion unattributable input tax to taxable and exempt supplies
Calculating input tax recoverable - step 4
Check whether the irrecoverable input tax is de minimis
Calculating input tax recoverable - step 5
Calculate the total recoverable input tax
VAT recovery percentage
Taxable supplies / total supplies
Rounded up to the nearest %
De minimis limit
If the input tax attributed to exempt supplies is:
- < £625 per month on average (£1875 per quarter and £7500 per year)
AND
- < half the total input tax in the period
If input tax attributable to exempt supplies is within de minimis limit
Can be recovered
Changes to partial exemption calculations - use PY %
Can base calculations on PY overall recovery percentage
Changes to partial exemption calculations - timing of adjustment
Can make annual adjustment in final VAT return of VAT year instead of first VAT return after end of VAT year
Supply of land or buildings
Exempt
Sale of new (< 3 year) commercial building
Exception
20% standard rated
Sale of brand new residence
Exception
Zero rated
Services for qualifying conversion of residential property
Exception
5% reduced rate
Opting to tax
Makes an exempt supply a standard rated supply