As explained at ¶19-469 the basic recovery % calculation under the standard method is as follows:

Total taxable supplies x 100 = Recovery %

Total supplies

To avoid either intentional or unintentional distortion of this percentage, certain sums must not be included as either taxable or exempt supplies, i.e. they are excluded from both the numerator and denominator (reg. 101(3)). Thus, the recovery % is calculated excluding the following sums:

1Any sum received in respect of capital goods which were used for the purposes of the business

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