VAT exemption rules explained

The partial exemption rules were revised with effect from 1 April 2010. There are two main changes: revised “de minimis” tests (there are now three) and the introduction of a new annual test.  “Up to 1 April 2010 there was one de minimis test – if your exempt input tax in relation to your purchases did not exceed £7,500 per annum on average, and if it was no more than 50% of your total input tax, you could reclaim all your input tax. That test remains unchanged and, unfortunately, yet again the thresholds have not been increased.

Rural estates and farms could use the new renewable energy feed-in tariff scheme to increase their annual income by tens of thousands of pounds each year, according to an analysis by Knight Frank’s renewable energy team, contained in the firm’s publication The Rural Report.