AlphaVAT requires details of the
taxable, exempt, excluded and residual transactions in order to
be able to perform the partial exemption calculation correctly.
In the case of outputs this is a matter of fact based on the nature
of the transaction, for inputs however this is an allocation process
based on use.
Where partial exemption is relevant,
the transaction data calculation blocks referred to in the transaction data help page,
are further broken out into the following:
Calculation
name |
Description
of treatment of the supply and effect on the VAT Return |
Output
VAT |
Taxable |
Supplies
of goods and services that are taxable for the purposes
of VAT, including supplies that are charged at either
the reduced or zero rate. |
Exempt |
Supplies
of goods and services that are exempt from VAT. Refer
to VAT rates on
different goods and services for further details
on VAT-exempt categories of supplies. |
Excluded |
Supplies
of goods and services that are to be excluded from the
partial exemption standard method calculation on the basis
of being distortive, irrespective of whether they are
taxable or exempt.
The
main examples of such supplies are capital goods or incidental
costs. Refer to VAT
Notice 706 section 4.8,  SI
1995/2518 reg 101(3) or PE32000 for
further details on supplies that should be excluded from
the standard method. |
Input VAT |
Taxable |
Purchases
of goods and services that are directly attributable to
taxable supplies.
Under
SI 1995/2518 reg 101(2)(b) this
is input VAT on goods and services that are used "exclusively
in making taxable supplies", and under reg 101(2)(c) no input VAT that relates
exclusively to exempt supplies or to carrying on any activity
other than making taxable supplies should be included. Input
VAT that is directly attributable to taxable supplies
is recoverable in full. |
Exempt |
Purchases
of goods and services that are directly attributable to
exempt supplies. Input VAT that is directly attributable
to exempt supplies is irrecoverable in full. |
Residual |
Purchases
of goods and services that are not directly attributable
to either taxable or exempt supplies. Input VAT is recoverable
in part. |
|
