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VAT a relief?
Key points
- VAT exemptions are mandatory: if a supply meets the definition in the law it is exempt. However the definitions of what meets the exemption are narrowly drawn.
- The standard method of partial exemption is a mechanical procedure involving attribution and apportionment.
- Effect of temporary letting of part of a hotel before the whole building was available for use.
- Attribution of different types of input supply.
- Two trades carried on by a single person are treated as a single business for VAT registration.
Exemption of certain goods and services is described as a ‘VAT relief’: in many cases the intention underlying the law is to reduce the cost of selected types of ‘essential’ supply to the public (healthcare education etc). However the way the rules operate is not always so beneficial to the businesses that have to put them into practice. This article...
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