V3.466 Partial exemption—longer period adjustment
Regulations made under VATA 1994, s 26(1) provide that a 'longer period' is applied to a taxable person in specified circumstances1 and, where this is the case, input tax provisionally attributed to taxable supplies in a prescribed accounting period is adjusted by reference to the longer period2. This adjustment is final, and it is not possible (except in the case of capital items, see V3.470) to make a subsequent adjustment to attribute the input tax to a later longer period3.
'Prescribed accounting period'
The term 'prescribed accounting period' ('PAP') is defined to include both a prescribed accounting period defined in keeping with the provisions described in V5.102 and a special accounting period ('SAP') as defined below4.
A person's first PAP is sub-divided into two or more SAPs if it would otherwise be six months or longer5. A SAP is each of a succession of periods of the same length as the next PAP which does not exceed
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