The Partial exemption recovery
report statement contains the following information:
Recovery
percentage: Taxable and total net amounts are calculated
across the relevant output calculation blocks (Sales, Exports,
Distance sales, and Dispatches) to arrive at the overall balance
of taxable and total supplies. The recovery percentage is
then derived as taxable sales over total sales.
This percentage is rounded up to two decimal places where residual
input VAT exceeds £400,000 per month on average, or zero decimal
places otherwise in accordance with  SI 1995/2518 reg 101(5).
Note that self-supplies under the reverse charge procedure
do not form part of supplies for the purposes of partial exemption
(see to VAT
Notice 706 section 4.8) and AlphaVAT will automatically
apply this treatment.
As VAT groups
are treated as a single taxable person, they have a single recovery
percentage as calculated by the group partial exemption method.
The recovery rate used within the calculation therefore depends
on the status of the group:
Prior
to consolidation of the group, the individual recovery
percentage will be used. This represents the ratio of
taxable supplies over total supplies for the individual
entity. The recoverable amounts are therefore provisional
at this stage. Post
consolidation of the group, the group recovery percentage
is used. This represents the ratio of taxable supplies
over total supplies over all members included within the
group recovery calculation, see the Managing
group settings help page for further information.
Note that the individual recovery percentage is still
shown but for memo purposes only.
Input
VAT: Taxable, exempt, residual and total VAT amounts
are calculated across the relevant input calculation blocks
(Purchases, Imports, Acquisitions, Reverse charge, Domestic
reverse charge, and Postponed VAT accounting) to arrive at
the overall balance of VAT amounts. Residual VAT is multiplied
by the appropriate recovery percentage to determine the amount
recoverable. De
minimis: The simplified and standard de minimis tests will
be applied by broadly comparing exempt input tax to £625 per
month on average, and 50% of total input tax. Total
taxable input tax: Where the de minimis does not apply,
total taxable input tax is derived as the sum of taxable input
VAT plus residual input VAT multiplied by the recovery percentage.
Where the de minimis does apply, total taxable input
tax is the sum of total input VAT. |
