Maximizing Input Tax Recovery Through Partial Exemption De Minimis Limits Strategy

• Hairdresser faced challenges with input tax recovery due to exempt rental income
• Advised to spread building work costs over two partial exemption tax years
• De minimis limits allow businesses with exempt and taxable income to claim all input tax if exempt input tax qualifies
• Exempt input tax must be less than £7,500 and less than 50% of total input tax
• Strategy helped maximize input tax recovery while staying compliant with VAT regulations
• Timing and planning can make a significant difference in managing VAT obligations effectively

Source: deeksvat.co.uk

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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