VAT partial exemption special methods

HMRC has updated VAT Notice 706: Partial Exemption Special Method to expand Appendix 2 which covers applications for a special method. New guidance has been added as a result of common queries HMRC raises with businesses when it is reviewing applications for special methods, with the intention of speeding up the application process.

Businesses are advised to include various details in their application, including a brief explanation of why their current method is no longer suitable or why the proposed new method is better, together with a worked example of the proposed method using actual figures – to help HMRC decide whether the proposal is low risk.

The section ‘How to apply’ sets out 43 questions to help guide businesses through the process.