--- title: "Partial Exemption VAT Advice in {{business_location}}" description: "Get clear partial exemption VAT calculations so you reclaim the right VAT on costs, stay compliant on returns, and reduce HMRC query risk." canonical: "https://hlsaccounting.co.uk/services/partial-exemption-vat-advice" --- VAT Services # Partial Exemption VAT Advice We help Cardiff businesses get their VAT partial exemption calculations right, so you recover every penny you're entitled to and stay on the right side of HMRC. Whether you're a charity, professional firm or mixed-activity business, we'll work out the best method for your circumstances and keep your records audit-ready. [Book a free consultation](https://calendly.com/hlsaccounting/new-client-meeting) 10 Years advising on VAT 150+ Clients across South Wales 100% HMRC compliance record ![A tax advisor and business client meet across a desk reviewing VAT documents with a calculator and laptop, in a clean neutral office setting.](/_next/image?url=%2Fapi%2Fmedia%2Ffile%2Fvat_tax_advisor_meeting_realistic_studio_photo.png%3Fv%3D1773064216683&w=1536&q=75&dpl=dpl_DEc4fGhEc1SCRZZutzoEsRuDy1CJ) ## What we cover under partial exemption From initial status checks to ongoing calculations and special method applications, we handle every aspect of VAT partial exemption so you can focus on running your business. ### Partial Exemption Status Review We analyse your supplies to determine whether you're partially exempt and what that means for your VAT recovery. ### Standard Method Calculations We apply the standard apportionment method and test whether you meet the de-minimis thresholds for simplified recovery. ### Special Method Applications When the standard method doesn't reflect your actual input use, we prepare and submit special method requests to HMRC. ### Ongoing Compliance Support Regular reviews and accurate record-keeping to ensure your partial exemption calculations stay correct as your business changes. ## How we make partial exemption straightforward If your business makes both taxable and exempt supplies, you cannot recover all the VAT you pay on purchases. The rules around what you can and cannot reclaim are complicated, and getting them wrong can mean leaving money on the table or facing penalties from HMRC. We take the guesswork out of partial exemption by working through your activities, applying the right calculation method, and keeping your records up to scratch. Most businesses start with the standard method, which uses the ratio of taxable supplies to total supplies. That works fine for some, but if your actual costs do not match that ratio, you could be missing out on legitimate recovery or accidentally overclaiming. We review your specific circumstances, run the numbers, and if a special method would serve you better, we handle the application process with HMRC. > We make sure you recover every penny you're entitled to, without overstepping the line. More information Partial exemption is particularly relevant for charities, professional practices, healthcare providers, and any business operating across multiple revenue streams. If your exempt supplies cross certain thresholds, you might lose the right to reclaim VAT altogether, so staying on top of the calculations is not just about compliance — it's about protecting your cash flow. We also keep an eye on blocked input tax, the costs you can never recover regardless of how they are used, and make sure your apportionment method is fair and reasonable. HMRC can override a method if it produces results that do not reflect the real use of your inputs, so accuracy and documentation matter. ### What is included - Full review of your taxable and exempt supplies - Calculation of recoverable input tax under the standard or special method - De-minimis threshold testing to simplify recovery where possible - Preparation and submission of special method applications to HMRC - Ongoing monitoring as your business activities change - Record-keeping support to keep you audit-ready Our clients are based right across Cardiff and South Wales, from Newport to Swansea, and we work with businesses of all sizes. Whether you are a dental practice in Pontypridd, a professional services firm in the city centre, or a charity operating across multiple sites, we will make sure your VAT position is sound and your recovery is optimised. If you are unsure whether partial exemption applies to you, or you have been using the standard method for years without reviewing it, now is a good time to check. The rules changed slightly in 2022, and HMRC now requires special method requests to go through official channels. We stay on top of the updates so you do not have to. ### Ready to talk? Book a free consultation and we'll come back to you within one working day to discuss your partial exemption needs. [Book a free consultation](https://calendly.com/hlsaccounting/new-client-meeting) ### You might also need - [VAT Health Checks](/services/vat-health-checks)→ - [International VAT Advice](/services/international-vat-advice)→ - [VAT Deregistration](/services/vat-deregistration)→ ## From the blog [ ![Smiling woman points to a sheet titled "VAT Tracker" while talking with a client in a salon](/_next/image?url=%2Fapi%2Fmedia%2Ffile%2Fwoman-holding-vat-tracker-salon.png%3Fv%3D1773236388760&w=1536&q=75&dpl=dpl_DEc4fGhEc1SCRZZutzoEsRuDy1CJ) ### Flat rate VAT vs standard VAT: which is better for your business? Flat Rate VAT or standard VAT? This plain English guide compares both schemes so you can work out which one saves your business more money. ](/blog/flat-rate-vat-vs-standard-vat)[ ![](/_next/image?url=%2Fapi%2Fmedia%2Ffile%2FChatGPT%2520Image%2520Mar%252011%252C%25202026%252C%252002_00_13%2520PM.png%3Fv%3D1773237624762&w=1536&q=75&dpl=dpl_DEc4fGhEc1SCRZZutzoEsRuDy1CJ) ### What triggers an HMRC VAT investigation and how to reduce your risk Worried about an HMRC VAT investigation? Find out what triggers one, how far back HMRC can go, and the practical steps you can take to reduce your risk. ](/blog/what-triggers-hmrc-vat-investigation)[ ![Woman points to 'Common VAT Mistakes for Small Businesses' sheet while a man looks stressed, head in hand](/_next/image?url=%2Fapi%2Fmedia%2Ffile%2Fwoman-pointing-vat-mistakes-stressed-man.png%3Fv%3D1773236388899&w=1536&q=75&dpl=dpl_DEc4fGhEc1SCRZZutzoEsRuDy1CJ) ### 9 VAT mistakes small businesses make (and how to fix them) From wrong VAT rates to missed reclaims, these are the most common VAT mistakes small businesses make and what to do if you have made one. ](/blog/common-vat-mistakes-small-businesses) ## Worth considering VAT Services ### Flat Rate VAT Scheme Advice Understand whether the Flat Rate VAT Scheme will save you money. We compare it to standard VAT, confirm your sector rate, and set up smooth VAT returns. [Flat Rate VAT Scheme Advice→](/services/flat-rate-vat-scheme-advice) VAT Services ### Making Tax Digital (MTD) for VAT Stay compliant with Making Tax Digital for VAT. We set up your software or bridging, get your VAT records in order, and submit returns to HMRC on time. [Making Tax Digital (MTD) for VAT→](/services/making-tax-digital-mtd-for-vat) VAT Services ### VAT Returns VAT Returns prepared and filed with HMRC, with checks on your sales and expenses, MTD-compliant submission, and clear summaries so you know exactly what is due. [VAT Returns→](/services/vat-returns) VAT Services ### VAT Registration We handle your HMRC VAT registration, confirm the right registration date, and help you pick a VAT scheme so you can invoice correctly and stay compliant from day one. [VAT Registration→](/services/vat-registration) ## Before you book Here are the questions we hear most often from businesses dealing with partial exemption for the first time. How do I know if my business is partially exempt? You are partially exempt if you make both taxable supplies (standard-rated, reduced-rated or zero-rated) and exempt supplies, and you incur VAT on costs that relate to both. Common examples include charities with trading income, professional firms offering a mix of services, and healthcare providers with private and exempt work. What is the standard method and when does it apply? The standard method calculates your recoverable input tax by applying the ratio of taxable supplies to total supplies. It applies automatically unless you agree a special method with HMRC, but HMRC can override it if it produces substantially different results from your actual input use. What are the de-minimis limits? There are two thresholds. If your exempt input tax is below both limits in a period, you can treat yourself as fully taxable and recover all your VAT. The limits are currently £625 per month on average and 50% of total input tax. We test these for you as part of our service. When should I consider a special method? If the standard method does not reflect how your costs are actually used, a special method can give you a fairer result and potentially increase your VAT recovery. We analyse your business activities and recommend a special method if it would benefit you, then handle the HMRC application. How often do partial exemption calculations need to be done? You calculate your recoverable input tax each VAT period, usually quarterly. You also perform an annual adjustment at the end of your partial exemption tax year to true up the figures. We handle both the ongoing calculations and the year-end reconciliation. What records do I need to keep? You need to keep accurate records of all your supplies, both taxable and exempt, and clear documentation of any costs that relate to both. Receipts, invoices and a breakdown of how you have apportioned your input tax are essential if HMRC ever queries your calculations. Can partial exemption rules change? Yes. HMRC updates guidance from time to time, and the process for applying for special methods changed in August 2022. We stay on top of regulatory updates and make sure your calculations and methods remain compliant. Do you work with businesses outside Cardiff? Absolutely. While we are based in Cardiff, we support clients right across South Wales, including Newport, Swansea, Bridgend, Pontypridd and the Vale of Glamorgan. Most of our partial exemption work is done remotely, so location is rarely an issue. ## Let's talk about your partial exemption Book a free consultation and we'll review your VAT position, explain your options, and give you a clear quote with no obligation. [Book a free consultation](https://calendly.com/hlsaccounting/new-client-meeting)