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HMRC internal manual

VAT Partial Exemption Guidance

Partial Exemption methods: example paragraphs: closing paragraphs

De minimis

For a method not approved under regulation 102ZA.

When you have calculated the value of your non-recoverable input tax you should refer to the ‘de minimis’ limits currently in effect.

For a method approved under regulation 102ZA.

Regulations 105A, 106 and 106ZA Value Added Tax Regulations 1995 (as amended) do not apply. You are not permitted to be treated as fully taxable under the ‘de minimis’ rules.

Longer period adjustment

A longer period adjustment must be carried out and declared in accordance with Regulation 107 of the VAT Regulations 1995 (as amended). [If a different period has been agreed for any reason give details here].

Your attention is also drawn to the provisions of the Capital Goods Scheme (Regulations 112 to 116 Value Added Tax Regulations 1995 (as amended).

Change of intended use

If you claim any input tax [VAT] as deductible by virtue of its intended use and the use, or the intention changes, you may need to make adjustments as described in Regulations 108 to 110 Value Added Tax Regulations 1995 (as amended).


You are required to keep records to show how you have calculated your deductible input tax and enable an officer of HM Revenue and Customs to verify the amount claimed.

Contact officer

Should you wish to discuss this letter please contact [me / name] at the above address.