VAT De mininis Rules | AccountingWEB

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


There are 4 comments. Login or register to view them.

Are you partly exempt?

leshoward |
leshoward's picture

You need to look at....

mackthefork |

OK that makes sense, I guess

Sunny |

I wouldn't say that....

mackthefork |