VAT – Partial Exemption frameworks
HMRC have published two updated VAT partial exemption frameworks which are relevant to:
- Housing Associations
- Higher Education Institutions
The frameworks are designed by HMRC with the assistance and involvement of relevant organisations and are freely available to interested parties within the relevant sectors.
For example, the housing associations’ framework was prepared in conjunction with the National Housing Federation, the Scottish Federation of Housing Associations and Community Housing Cymru and with the knowledge of the Northern Ireland Federation of Housing Associations.
The framework documents provide information on when and why partial exemption special methods (PESM) are likely to be required. One of the aims of the framework document is to provide a useful outline to agreeing a PESM with a minimal difference of opinion.
The use of the frameworks is not compulsory although HMRC comment that "HMRC officers will need to review non-framework proposals in greater depth before reaching any conclusions on them".