VAT Partial Exemption

There are a number of goods and services that are exempt from VAT for various reasons which can make calculating tax liabilities extremely complicated. We provide the expertise to ensure you can navigate your VAT return.



Value-Added Tax (VAT) can already be a complicated tax to navigate; the tax that is applied to the sale of taxable goods and services at every stage of production. There are a number of goods and services however that are exempt from VAT for various reasons. If you are a business that makes or sells both taxable and exempt (non-taxable) goods or services then VAT can be extremely difficult to calculate when it comes to filing your taxes. In this scenario, you would be classed as a partially exempt business.

When filing your VAT return you ultimately need to calculate your tax liability by looking at the difference between the output VAT and input VAT charges. There are some watch-outs and confusions that regularly occur. For example, zero-rate or reduced-rate items are not the same as exempt items but zero-rated items in particular, often get mixed up with exempt items. People ask ‘is there a difference?’ The answer is there’s a massive difference between the 2 when claiming back against your expenses.

By understanding how partial exemption works, businesses can correctly calculate the costs they can reclaim. Very few businesses can calculate this correctly without the services of VAT experts. At Bracey’s, we are well-positioned to provide expert advice on this very complex tax. Our VAT team, headed up by ex-HMRC VAT inspector Michele Harris, have a wealth of experience in advising across multiple areas of VAT making savings for clients where possible and paying any due taxes where necessary. As a business, you can be assured you get the best advice to give you the confidence that your projects are VAT compliant and that your liabilities are as low as they can possibly be.

Give Michele a call to have a 30-minute free consultation to see how we can help your partially exempt business manage your VAT.

What our clients say

« Bracey’s have provided us with a whole host of advice – personal tax, PAYE, R&D claims, Corporation Tax, payroll & pensions. As with a lot of businesses, we have randomly been selected for a VAT enquiry from HMRC. This can be quite a daunting occasion for a small business but the team from Bracey’s attended our offices to offer HMRC any information they needed and they conducted themselves in a capable, unfazed manner «

Managing Director, Hertfordshire Technology Firm

« Bracey’s have dealt with a number of areas as part of my tax return including foreign exchange income, online sales, buy to let income, VAT registration, advice regarding companies house and everything else in between. Nothing has been too much trouble or too complicated. «

Gerard Sandford, LLP

« Bracey’s have been instrumental in streamlining my invoicing procedure, they are speedy with their responses, friendly and always extremely patient; which if you knew me, is really needed! Braceys have provided me with accounts/tax/invoicing and all the usual; but on top of this, advice on a whole manner of situations that arise in my business. «

Jim Erwood - Founder - Extra Time Management Ltd
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