VBNB35000 | VAT Business and Non-Business: Principles: Retrospective Changes to a Method

If a business requests a retrospective change to a previously agreed method of apportionment it will need to demonstrate that:

• the former method did not produce a fair and reasonable result; and

• the proposed method does achieve this objective.

HMRC will normally approve the change provided these criteria are met. We will normally turn down the request if either of the criteria is not met. See Trustees of the Victoria and Albert Museum (VBNB73500).

Where the agreed method of apportionment is part of a combined business/non-business and partial exemption method a retrospective change of method is not normally allowed. Please see PE VAT Partial Exemption Guidance for more about the limited availability of retrospection in partial exemption methods.