Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

VAT Partial Exemption Guidance

From
HM Revenue & Customs
Updated
, see all updates

Legal history and glossary of terms: history of the De Minimis limit

Date Legislation
   
  The business was treated as fully taxable if in any tax period, or over the year as a whole the following limits were not exceeded:
August 1972 - March 1978 If the value of exempt outputs was less than: * £100 per month on average, or * less than 5% of total outputs, whichever was the greater. 
April 1978 - March 1983 If the value of the exempt outputs as less than: * £100 per month on average; or * 5% of the value of his total outputs; or 
  * 25% of the value of his total outputs and less than £10,000 a month on average; or * 50% of the value of his total outputs and less than £5,000 a month on average.
  For special methods, the following could also be considered: If the exempt output exceeded the above limits but the input tax attribute was comparatively small, and the inputs rule may have applied. Under that
  rule if the amount of input tax attributable to exempt outputs was less than 5% of the total input tax, he could be treated as a fully taxable person. It could only be used with written authority.
April 1983 - March 1984 Under the outputs rule, if the value of exempt outputs was less than: * £200 a month on average * both 25% of the value of total outputs and less than £16,000 a month on average; or 
  * both 50% of the value of total outputs and less than £8,000 a month on average; or * 5% of the value of your total outputs.
  Under the Inputs rule if: * they had permission to use the direct attribution method; and 
  * the amount of input tax attributable to exempt outputs was less than 5% of the total input tax, (excluding that attributable to habitually
  occupied business premises and assignments of debts) and they satisfied the conditions to be treated as fully taxable if they dealt in securities or loans, deposits of money or credit.
April 1984- March 1987 Under the outputs rule if the value of exempt outputs was less than: * £200 a month on average 
  * both 25% of the value of total outputs and less than £16,000 a month on average; or * both 50% of the value of total outputs and less than £8,000 a month on average; or * 1% of the value of the total outputs.
  Under the Inputs rule if: * they had permission to use the direct attribution method; and 
  * the amount of input tax attributable to exempt outputs was less than 5% of the total input tax and not more than £200 per month on average. Traders had to exclude the input tax attributable to the disposal of habitually
  occupied business premises and assignments of debts. Fully taxable traders involved with incidental dealings with securities could ignore the input tax related to those dealings.
April 1987 - March 1992 If the exempt input tax was less than: * £100 per month on average; or * both £250 per month on average and 50% of all input tax or * both £500 per month on average and 25% of all input tax 
  Simplification Measure - Provided traders were not in the financial services sector, traders were allowed to ignore exempt input tax relating to certain supplies in the areas of lending money, arranging insurance, hire purchase.
  credit, (unless such supplies were made with such regularity, and input tax was incurred on such a scale as to constitute a business in its own right) If they had no other input tax, traders could be treated as fully taxable
April 1992 - November 1994 If the exempt input tax was not more than £600 per month on average.
  Simplification Measure - Provided traders were not in the financial services sector, traders were allowed to ignore exempt input tax relating to certain supplies in the areas of lending money, arranging insurance, hire purchase
  credit, (unless such supplies were made with such regularity, and input tax was incurred on such a scale as to constitute a business in its own right) If they had no other input tax, traders could be treated as fully taxable.
December 1994 -March 1999 If the exempt input tax was not more than: * £625 per month on average; and * 50% of total input tax. 
  Simplification Measure - Provided traders were not in the financial services sector, traders were allowed to ignore exempt input tax relating to certain supplies in the areas of lending money, arranging insurance, hire purchase
  credit, (unless such supplies were made with such regularity, and input tax was incurred on such a scale as to constitute a business in its own right) If they had no other input tax, traders could be treated as fully taxable.
10 March 1999 - If the exempt input tax is not more than: * £625 per month on average; and * 50% of total input tax.Simplification Measure (Regulation 105) was repealed because of avoidance and complexity.