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Category: Budget

VAT – Partial Exemption and the Capital Goods Scheme

The Office of Tax simplification reported on the complex area of Partial Exemption and the Capital Goods Scheme in 2017. This is just one area of VAT law that really needs to be updated, its administration is cumbersome and the financial thresholds out of date, so it is an area we would welcome change.

The results of the now closed consultation show VAT registered entities to which either Partial Exemption or the Capital Goods Scheme applies have to allocate a significant amount of time and resource to carry out the complex calculations or agree special methods with HM Revenue & Customs.

Charities have been massively affected by the Coronavirus Pandemic and many of them will be affected by these calculations so there was an opportunity for the Treasury to do more to help them.

So it was perhaps a little disappointing that the “Next steps” identified by HMRC were to standardise some application forms and processes, rather that make some more sweeping changes to reduce the burden created by the complexity.

This concludes our articles on the consultations and proposals from ‘Tax Day’. You can email us at and we can arrange a call back to discuss anything in more detail.