Changes to VAT partial exemption

Unfortunately, the outcome is somewhat underwhelming. The Government has announced it is setting up a central point to submit applications for partial exemption special methods as well as an application form. But whilst these changes might increase the efficiency with which applications are logged by HMRC, they seem unlikely to increase the speed at which decisions as to whether to approve such applications are made.

HMRC is reviewing sectoral frameworks within which methods may be set, and has said it will consider increases to the partial exemption de minimis limit and the threshold at which items fall within the Capital Goods Scheme.

Given that simplification of these provisions was a key recommendation of the Office for Tax Simplification, this is a disappointing outcome.