VAT De mininis Rules
I have been trying to work out the de minimis rules for VAT.
I have read the HMRC notice and I think I understand what it means.
I have purchases of about £30,000 per year, but these are mostly except inputs, only about 30% have VAT charged.
I also have expenses such as utility bills, advertising, of about £15000 per year.
Therefore exempt purchases are worth £21000 per year. Input Tax at 20% would be £3500, which is about £290 per month. This is less than £625 per month. The second condition is that total exempt inputs (costs) are less than half of total costs. £21000/£45000 is about 47%.
Does this mean that I can claim input tax on all inputs of £45000/6 in my VAT return.
Secondly the 30% ratio is a rough estimate, what proof would I need to give hmrc that it is correct, and would they actually challenge it since the 47% is awfully close to half
Thanks in advance
- Is Dropbox right for your client comms? Webinar 15 May 288
- Set up a company pension 242
- 2011 FHL loss & ITA 2007 s74a 213
- HMRC Lost PAYE Clients 182
- EIS 176
- Driving sales growth 176
- Where's our 10%? 171
- Regiatration of a Trust 170
- Cost of converting property - who pays? 169
- Double holidays for Euro bank accounts ! 161
- Accounting for gift vouchers - paid for and donated 152
- IHT business relief of unlisted loan stock 147
- Best structure 145
- Inorporation using S165 gift relief 144
- Break up basis accounting 143
- Forms P11D[b] and Payment Slips 140
- Property owned privately 136
- Can I defer direct customer acquisition costs? 135
- Mortgage application for intending director. 134
- Membership of trade association - tax deductible? 128


Are you partly exempt?