Revenue & Customs Brief 19/09
VAT: Partial Exemption - Changes to the Standard Method
This Revenue and Customs Brief article announces four changes to the partial exemption standard method that take effect from 1 April 2009.
- in-year provisional recovery rate
- early annual adjustment
- use-based option for new partly exempt businesses
- widening the scope of the standard method.
The changes are being made following responses to the consultation on ideas to simplify the partial exemption rules confirmed strong support for their implementation.
The first three changes are optional and businesses can benefit from them without seeking approval from HM Revenue & Customs (HMRC). Change four is compulsory and affects businesses that make:
- supplies of services to customers outside the UK
- certain financial supplies such as shares and bonds
- supplies made from establishments located outside the UK
Further information
Further information can be found in VAT Information Sheet 04/09 which supersedes or compliments existing guidance as appropriate. Legislation will shortly be published on the HMRC website.
Issued 1 April 2009
