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HMRC internal manual

VAT Retail schemes guidance

HM Revenue & Customs
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Special Arrangements for certain professions and trades: Women's Royal Voluntary Service (WRVS) hospital units: Calculating recoverable input tax under the WRVS adaptation

Most of the registered WRVS hospital units make some exempt supplies (such as supplies of catering to patients within the hospital) and incur input tax relating to these supplies: they are, therefore, partly exempt. In order to determine whether they are within the partial exemption de minimis limits, and to work out their recoverable input tax, they must carry out the calculation shown below.

The recoverable input tax consists of three elements

  1. Input tax incurred on non-catering standard rated purchases for resale from Purchases record (Total J), recoverable in full


  1. a proportion of input tax incurred on catering purchases, equivalent to the percentage of sales to non-patients agreed with us - total F in paragraph VRS8515 (catering input tax x Z%)


  1. a percentage of the input tax incurred on expense total Y, as calculated below.

How to work out the percentage of input tax that can be claimed on expense items

Action Total £
1. Add up the ESP of zero rated non-catering supplies. K
2. Add up the ESP of standard rated non-catering supplies. L
3. Enter total catering sales (total E of the output tax calculation at step 2 of the above paragraph. E
4. Calculate the standard-rated catering sales by applying the agreed percentage:  
Total E x Z%  

where Z is the percentage of catering supplies which are standard rated as supplied to non-patients - see step 2 of the above paragraph for more information.  | M       | | 5. Work out the total standard-rated sales:

Total K + total L.                                                                                                                                                                                                              | N       | | 6. Work out the total tax exclusive standard-rated sales:                                                                                                                                                                                                                        |         | | * Total N x 1/6 (VAT fraction @ 20%);                                                                                                                                                                                                                                            | P       | | * Total N - Total P.                                                                                                                                                                                                                                                             | R       | | 7. Total taxable sales will then be:

Total R + total K.                                                                                                                                                                                                                     | S       | | 8. To work out all the sales:                                                                                                                                                                                                                                                    |         | | * Total E - total M;                                                                                                                                                                                                                                                             | T       | | * Total R + total S                                                                                                                                                                                                                                                              | U       | | 9. To work out the percentage of input tax that may be deducted on expense items:

Total R x 100 / Total T.   

This percentage, if not a whole number, should be rounded up to the next whole number in each tax period (i.e. 60.5% becomes 61%).                | V%      | | 10. To calculate input tax allowable on expense items:

add up the VAT shown in the expense record.                                                                                                                                                                          | W       | | Total W x V%                                                                                                                                                                                                                                                                     | Y       |

The total input tax reclaimable is:

Total J + total F + total Y