Anti Avoidance Group: Partial Exemption
Who we are
The Partial Exemption (PE) Regime is responsible for partial exemption policy, protecting yield and reducing the tax gap.
PE is the rules by which the 140,000 partly exempt VAT registered businesses (such as banks and insurance companies) determine the amount of recoverable VAT on their costs. Irrecoverable VAT blocked by PE exceeds £10billion per year, making PE a high-risk area for VAT compliance and avoidance work.
The PE Team’s objective is to improve the effectiveness of the PE regime by developing and maintaining robust legislation and policy, supporting operational colleagues apply the rules consistently, and exercising PE powers to tackle serious non-compliance.
The team includes a national resource of PE Specialist Officers (PESOs) who work closely with the Large Business Services (LBS) tackling poor PE compliance and authorising the use of PE legal powers when necessary. The team also provides leadership for the national network of 19 PE regional Officers (PESOs) who deal with most partly exempt businesses outside of LBS.
What we do
Working closely with HM Treasury and HMRC colleagues, we:
- provide advice and support to Ministers, HMT and HMRC colleagues on PE related policy issues
- develop, deliver and maintain a PE strategy (as part of HMRC’s compliance strategy)
- centrally administer the use of PE powers, including directions and notices
- consult with trader sector bodies about PE to ensure a consistent approach to generic sector-wide issues
- manage litigation of complex PE cases to defend existing legislation and to develop new precedent
- continually review existing PE policy and practice identifying risks and opportunities for improvement
- introduce new policy and legislation to tackle non-compliance and to improve effectiveness; and,
- support our customers by maintaining clear and up to date guidance, public notices and news releases.
