Partial Exemption in UK
Over the years, banks in the UK have found it extremely difficult to determine exactly how much VAT is recoverable. Attributing expenditure to one specific income unit, and thus calculating partial exemption, requires multiple rules to be understood and configured. To add to this, heavy calculations are done without the help of technology to find out partial exemption increases the chance of manual errors.
As such, the need to recover and calculate partial exemption on VAT, manually, through complex formulas has become painstaking and a huge investment for banks. This makes automation of partial exemption an absolute necessity, and the need to calculate recoverable VAT imperative, and inevitable!