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HMRC internal manual

VAT Partial Exemption Guidance

Partial Exemption powers: special method override notice: example of a special method override notice

[Name and address of business]

Special Method Override Notice


  1. This is a special method override Notice (“Notice”) served under regulation 102A of the VAT Regulations 1995 (SI 1995/2518) as amended by the VAT (Amendment) (No 6) Regulations 2003 (SI 2003/3220).
  2. This Notice is served because your partial exemption special method does not fairly and reasonably represent the extent to which goods or services are used by you or are to be used by you in making taxable supplies.
  3. The reasons in support of this Notice are set out in the annex to this Notice.

Effective Date of this Notice

  1. The effective date of this Notice is [insert date].
  2. This Notice applies to each:
* prescribed accounting period commencing on or after the effective date; and
* longer period to the extent of that part of the longer period falling on or after the effective date.
  1. This Notice continues to apply until a new special method is approved or directed, or until the Commissioners allow the use of the standard method.

Effect of this Notice

  1. In all periods or part periods covered by this Notice you must, in accordance with regulation 102B:
* determine the amount of input tax otherwise recoverable by application of your partial exemption special method; and
* determine the amount of input tax recoverable in accordance with the use, or intended use, of goods and services in making taxable supplies; and
* account for the difference on the return for the period.

Right of Appeal

  1. If you disagree with [this Notice] [the decision in this letter] write to us with your reasons within 30 days and we will look at it again. If you prefer, we will arrange for a review by a person not previously involved in the matter. You will then have the right to appeal to an independent tribunal. Alternatively you can appeal direct to the tribunal within 30 days of this letter. Information on review and appeals is available in our fact-sheet, HMRC 1, at  or by phoning 0845 900 0404.”