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HMRC internal manual

VAT Government and Public Bodies

Section 33 bodies: recoverable VAT: mixed business and non-business use and exempt activities

If a section 33 body is unable to accurately differentiate between VAT incurred on business and non-business activities, section 33(2) (see VATGPB4120) allows them to recover VAT attributable to any exempt supplies so long as the amount involved is an ‘insignificant proportion’ of the VAT charged. See VATGPB4510 for more information on what amounts to an insignificant proportion.