inputs ans outputs and special schemes

partial exemption

where a business makes both taxable and exempt supplies and has to calculate the amount of input tax it can reclaim, based on the extent of its taxable supplies

'de minimis' limit

where the amount of input tax which relates to a supplier's exempt supplies - which the supplier could not normally reclaim - is so insignificant that HMRC allows the business to reclaim it

business entertainment

entertainment provided free of charge to people who are not employees of a business - food, drink, accommodation, theatre, sport

blocked expenses

expense of the business on which the input VAT cannot be reclaimed, ie it is blocked

fuel scale charge

a charge based on the COz emissions of a vehicle to account for the VAT on fuel for personal use of a company vehicle

exports and imports

the sale and purchase of goods to/from business located abroad

postponed VAT accounting

businesses declare the VAT on imports and reclaim the VAT on the same VAT Return, rather than paying the VAT when the goods arrive in the UK

reverse charge

businesses that import services must treat the supply as a sale and a purchase, and include the VAT on the imported service as both output and input VAT on the VAT Return

annual accounting scheme

a scheme which enables businesses (with annual taxable turnover of £1.35 million or less) to make VAT Returns annually rather than quarterly - VAT owing is paid in regular instalments and the VAT Return is due two months after the end of the VAT year

flat rate scheme

a scheme which enables businesses with an annual taxable turnover of up to £150,000 to pay VAT at a flat percentage rate based on tax inclusive turnover

limited cost business

a business operating the flat rate scheme, with costs of goods that are less than either 2% of its turnover, or £1,000 a year (if its costs are more than 2% of turnover), must use a flat rate of 16.5% if it wishes to operate the flat rate scheme for VAT

cash accounting scheme

a scheme which allows businesses (with annual taxable turnover of £1.35 million or less to account for VAT on the basis of payments received and made rather than the tax point on invoices received and issued; it provides automatic relief for VAT on bad debts