Partial exemption options

This section offers the following options:

• No: This should be selected when no partial exemption applies to your entity

• Standard method: Use this option where standard method values-based recovery is relevant for a partially exempt entity

• Special method: Use this option where special method values-based recovery is relevant for a partially exempt entity.

Please refer to the Partial exemption overview help page for further details.

Standard method

Use this option where standard method values-based recovery is relevant for a partially exempt entity. Setting this flag to Yes will prompt AlphaVAT to present additional calculation inputs at the Map files stage in order for any transactions to be filtered into taxable, exempt, excluded and residual for the purposes of the partial exemption calculation.

Recovery of residual input VAT will be applied based on the proportion of taxable sales to total sales for the period. Upon running the calculation, the Partial exemption recovery report statement will be displayed to explain the recovery calculation that is performed by AlphaVAT.

Special method

Use this option where special method recovery is relevant for a partially exempt entity. After setting this flag to Yes, you must then specify whether the recovery method is a sectorised method.

Sectorised methods are those where the residual input tax is divided between the different areas of the business. Generally, these methods are used because the recovery of non-attributable input tax by reference to one calculation, via averaging, would not give a fair and reasonable result because the costs are used in each sector in different proportions.

Setting this flag to Yes will prompt AlphaVAT to present the PESM builder screen after you have clicked on the Save and continue button (see PESM builder help section for more information).

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