TaxDigit

Author: Amir Rafiei

VAT becomes considerably more complex for partially exempt businesses. When a business makes both taxable and exempt supplies, it cannot recover all of its input VAT, and special rules determine how much can be reclaimed.

Partial exemption VAT advice for partially exempt businesses from TaxDigit

What Is Partial Exemption?

Partially exempt businesses make a mix of taxable supplies, which allow VAT recovery, and exempt supplies, which do not. Common examples include some financial, property and insurance activities. The challenge is splitting input VAT fairly between the two.

The Standard Method

Most partially exempt businesses use the standard method, recovering VAT directly attributable to taxable supplies in full, blocking VAT on exempt supplies, and apportioning the remainder based on turnover. A de minimis limit can allow full recovery where exempt input VAT is small.

Special Methods

Where the standard method gives an unfair result, HMRC may agree a special method that better reflects how costs are used. Annual adjustments then true up the year’s recovery.

How TaxDigit Can Help

Our Guildford-based team helps partially exempt businesses calculate and maximise VAT recovery correctly. Get in touch for specialist VAT support.

Partially Exempt Businesses: UK-Wide VAT Support

Partially exempt businesses face some of the trickiest VAT rules, and they operate right across the United Kingdom, not just near our Guildford head office. TaxDigit helps partially exempt businesses UK-wide recover the right amount of input VAT and stay on the correct side of the rules.

Our chartered certified accountants build a robust partial exemption method, run the annual adjustment and check the de minimis limits so your VAT recovery is both accurate and defensible. We support clients UK-wide, both remotely and from our Guildford office.

The hardest part for partially exempt businesses is often the apportionment of overhead VAT that relates to both taxable and exempt activities. The standard method does not always give a fair result, and a special method agreed with HMRC can sometimes recover significantly more. We review which approach suits your business and keep the calculation consistent year on year.

How we help partially exempt businesses

  • Calculating recoverable input VAT under the standard method
  • Applying the de minimis limits to recover VAT in full where possible
  • Designing and agreeing a special method with HMRC where beneficial
  • Running the annual adjustment accurately
  • Documenting the method so it withstands an HMRC review

HMRC explains exemption and partial exemption here: HMRC guidance on VAT exemption and partial exemption.

Frequently Asked Questions

What is a partially exempt business?
A partially exempt business makes both taxable and exempt supplies, which means it cannot recover all of its input VAT and must apportion it under partial exemption rules.

What are the de minimis limits?
If exempt input VAT falls below certain limits, a partially exempt business may be able to recover all of its input VAT for that period.

Can TaxDigit help if I am not based in Guildford?
Yes. We advise partially exempt businesses UK-wide, remotely and from our Guildford office.

A Transfer of Going Concern, or TOGC, is an important VAT concept when a business changes hands. Where the conditions are met, the sale of a business can be treated as outside the scope of VAT, so no VAT is charged on the transfer.

Transfer of Going Concern TOGC VAT advice on business sales from TaxDigit

What Is a TOGC?

A Transfer of Going Concern applies when a business, or a distinct part of it, is sold as a going concern and continues to trade under the new owner. Meeting the conditions means the transaction is not treated as a supply for VAT, avoiding an unnecessary VAT charge.

The Key Conditions

For TOGC treatment, the assets must be used by the buyer to carry on the same kind of business, there must be no break in trading, and the buyer must usually be VAT-registered. Special rules apply where property is involved, including the option to tax.

Why It Matters

Getting TOGC treatment wrong can lead to unexpected VAT, cash-flow strain or disputes between buyer and seller, so the conditions should be checked carefully before completion.

How TaxDigit Can Help

Our Guildford-based team helps buyers and sellers confirm whether a Transfer of Going Concern applies. Contact us before your transaction completes.

Transfer of Going Concern: UK-Wide VAT Support

A Transfer of Going Concern is a key VAT issue whenever a business changes hands, and it arises right across the United Kingdom, not just near our Guildford head office. TaxDigit helps buyers and sellers UK-wide confirm whether a sale qualifies as a Transfer of Going Concern so VAT is handled correctly.

Our chartered certified accountants check each TOGC condition, advise on property and option-to-tax points, and make sure the treatment is agreed before completion. We support clients UK-wide, both remotely and from our Guildford office.

Getting a Transfer of Going Concern wrong can be expensive for both sides. If VAT should have been charged but was not, the seller can face an assessment; if it was charged unnecessarily, the buyer may struggle to recover it and could overpay Stamp Duty Land Tax on a property. We pin down the treatment early and document the conditions so the deal completes cleanly.

How we help with a Transfer of Going Concern

  • Reviewing whether the sale meets all the TOGC conditions
  • Advising on property TOGCs and the option to tax
  • Confirming VAT registration requirements for the buyer
  • Documenting the treatment in the sale agreement
  • Coordinating with solicitors so VAT and SDLT align

HMRC explains the rules here: HMRC guidance on transferring a business as a going concern (VAT Notice 700/9).

Frequently Asked Questions

What is a Transfer of Going Concern?
It is the sale of a business as a going concern that, where the conditions are met, is treated as outside the scope of VAT, so no VAT is charged on the transfer.

Does a property sale qualify as a TOGC?
It can, but there are extra conditions around the option to tax and the buyer’s VAT position, so property TOGCs need careful checking.

Can TaxDigit help if I am not based in Guildford?
Yes. We advise on Transfers of Going Concern for clients UK-wide, remotely and from our Guildford office.

Filing a late Corporation Tax return can be a costly mistake for any company. HMRC applies automatic penalties for missed deadlines, and these escalate the longer a return remains outstanding, so understanding the consequences is important.

Late Corporation Tax return penalties and filing advice from TaxDigit accountants

The Penalty Structure

A late Corporation Tax return triggers an immediate penalty as soon as the deadline passes, with a further penalty if the delay continues beyond three months. Returns that are very late attract additional penalties based on a percentage of the tax due, so costs build quickly.

Interest on Late Tax

Penalties for a late return are separate from the tax itself. If the Corporation Tax is also paid late, HMRC charges interest from the due date, adding to the overall cost of falling behind.

Avoiding Penalties

The simplest way to avoid a late Corporation Tax return is good record-keeping and early preparation. Where there is a genuine reasonable excuse for a delay, it may be possible to appeal a penalty.

How TaxDigit Can Help

Our Guildford-based team helps companies stay on top of deadlines and avoid a late Corporation Tax return. Get in touch to keep your filings on track.

Late Corporation Tax Return: UK-Wide Support

A late Corporation Tax return can cost companies right across the United Kingdom, not just those near our Guildford head office. TaxDigit helps companies UK-wide file on time, deal with existing penalties and put systems in place so deadlines are never missed again.

Our chartered certified accountants manage your filing calendar, prepare accurate returns and, where penalties have arisen, help you appeal where there is a reasonable excuse. We support clients UK-wide, both remotely and from our Guildford office.

The penalty for a late Corporation Tax return escalates quickly, from an initial fixed penalty to larger charges and tax-geared penalties once a return is several months overdue. Repeated lateness increases the fixed penalties further. Acting early almost always reduces the damage, so we prioritise bringing any outstanding returns up to date and protecting you from further charges.

How we help with a late Corporation Tax return

  • Bringing overdue Corporation Tax returns up to date quickly
  • Calculating and explaining the penalties that apply
  • Appealing penalties where there is a reasonable excuse
  • Setting up a reliable filing calendar to avoid future lateness
  • Coordinating Companies House and HMRC deadlines together

HMRC explains Company Tax Returns and deadlines here: HMRC guidance on Company Tax Returns.

Frequently Asked Questions

What happens if I file a late Corporation Tax return?
HMRC applies automatic penalties that start with a fixed amount and escalate the longer the return is outstanding, with additional tax-geared penalties once it is more than six months late.

Can late filing penalties be appealed?
Yes, if you have a reasonable excuse you can appeal, and filing the outstanding return promptly helps limit further penalties.

Can TaxDigit help if I am not based in Guildford?
Yes. We help with late Corporation Tax returns for clients UK-wide, remotely and from our Guildford office.