Andrew Needham looks at how partly exempt businesses can reduce the amount of irrecoverable VAT they incur.
Partial exemption
A business that makes a mixture of taxable and exempt supplies is known as ‘partially exempt’. Businesses that make exempt supplies are not entitled to recover the VAT on costs associated with making the exempt supplies and so cannot recover all of the VAT that they incur.
However, there are some things that a business can do to reduce the amount of irrecoverable VAT that it incurs.
Reduce the amount of VAT incurred
There are a number of things that a business can do to reduce the amount of VAT that the business incurs.
From a VAT perspective, a partially exempt business should employ its own staff and not hire temporary agency staff. VAT is charged on the
