Customs currently allow NHS bodies to complete a Partial Exemption calculation annually in conjunction with a business activity claim. This is a concession, as the legal requirement is that the calculation is completed for each monthly VAT period, with an annual adjustment made at the end of the year.

It has been Customs’ policy in recent years not to accept annual business claims without a partial exemption calculation also being completed.

Even if Trusts choose not to submit a business activities claim, there is still a statutory requirement to carry out the partial exemption calculations to ensure that trusts meet their legal requirements regarding Partial exemption.

We wish to remind our clients and other NHS Trusts that when we calculate annual business claims on behalf of our clients, we also complete a separate partial exemption calculation as part of this exercise to ensure that you meet your statutory obligations.