VAT - Partial Exemption Calculation
Ability to have a VAT partial exemption calculation.
Purpose: Because some industries (e.g. charity) have VAT partial exemption, having this ability would save users time in calculating the VAT.
AdminXero Team
(Admin, Xero)
shared this idea
Hey everyone, appreciate that this idea's intent is to help save user's time in calculating the VAT, but I wanted to share that it is possible to record partial VAT exemptions, for those who aren't aware. We will continue to to track interest in this idea but in the meantime you can:
- Calculate your own your partial exemption adjustment amounts
- Enter them as VAT box adjustments on your non-MTD or MTD VAT return
Alternatively, if you use a set percentage adjustment you could do one of the following:
- Add a custom Tax Rate for your % rate.
- Adjust the VAT on each bill to the amount you can claim. Click the + next to the tax rate to do this. (You'll need to use the 'Amounts are' Tax Exclusive option to see it.)
We recommend you talk to your accounting advisor or HMRC if you need more help with this.
There's more information on this in the following Xero Central articles:
Adjust the amounts on a VAT return
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Tatjana Satenevskaya
commented
I am afraid a solution offered by Hannah does not resolve PE calculations as these are just individual %ages adjustments. For industries, where there need to be a working produced to block relevant VAT claims i.e. residual
VAT based on de-minimis rate and custom proportions are always manual, therefore, this idea is critically important to ensure the VAT compliance with HMRC. -
Lynn Collins
commented
We deal with alot of medical practices with pharmacies. We cannot bring them on to Xero as the partial exemption is too complicated to do.