HMRC Update - Framework for Higher Education Institutions PESM
HMRC has now made publicly available the new version of the Framework for Higher Education Institutions (HEIs) partial exemption special methods (PESM).
This has been agreed with the British Universities Finance Directors' Group and the Higher Education Funding Council for England providing guidance on formulating PESM for HEIs. The framework includes guidance on:
• How to determine a fair ‘value’ for supplies of grant-supported education;
• When to add ‘sectors’ to a PE method; and,
• How to identify and deal with ‘distorting supplies’.
The document adds that this framework is not mandatory and does not replace the content of VAT Notice 706 (Partial Exemption), but adopting its principles will enable HMRC more readily to give approval for a PESM for which a Statutory Declaration has been made. It takes full account of the findings of the KPMG Review of Partial Exemption in the Higher Education Sector (KPMG Review) that was commissioned by BUFDG, HEFCE and HMRC and which was published in June 2007.
Click here to view the guidance in full.
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