Imminent withdrawal of ability to backdate Housing Association partial exemption special methods (PESM)
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Imminent withdrawal of ability to backdate Housing Association partial exemption special methods (PESM)
Imminent withdrawal of ability to backdate Housing Association partial exemption special methods (PESM)
Tue 03 Dec 2019
Housing Association clients of the VAT team are being told by HMRC that they will be removing the special provision granted to Housing Associations allowing them to backdate a PESM four years. Apparently this is due to be removed from 1 May 2020.
The current housing association framework agreement has the following para:
“Any HA that agrees a PESM that is in line with the guidance set out in the Framework within a reasonable time from it being updated can backdate the application of that PESM to the start of its first tax year within the capping limit for claiming input tax (currently four years) if it wishes. This applies whether the HA is using the standard method, an existing special method, or has not yet adopted a method. HMRC, in conjunction with HA representative bodies, will announce when this offer is to terminate, giving at least 6 months’ notice.”
If you are a housing association thinking about, or in the process of, revising your PESM, please get in touch with a member of the Mazars indirect tax team for a further discussion.
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