20 September 2021 
Andrea Marshall, Tax Specialist
HMRC have confirmed that the annual adjustment for the 2020/21 Partial Exemption year, can be carried out on the April 2022 VAT return when it relies on TRAC 2020-21, which is not due until 31 March 2022. Please see the background and email exchange with HMRC below, which confirms the extension.
The BUFDG Weekly Digest for 8 September 2021, announced that:
OfS has recently provided details of its reporting deadlines for returns due in 2021-22, including the deadlines for AFR. It provides notice of the deadline for TRAC 2020-21 (i.e. 31 March 2022, but early returns strongly encouraged) and confirmation that TRAC(T) will not be collected for 2020-21. This notice was published by OfS on 20 July 2021 along with several other OfS announcements about recurrent and capital funding, and about the consultation on Quality and standards and TEF, so may have been missed. In addition, the most recent TRAC benchmarking data is available on the OfS website.
We emailed HMRC with the following request:
We will have the same issue next year with the due date for the TRAC return as we had this year (please see the email trail below from January 2021).
OfS issued the attached letter in July 2021 and if you go to the final line of the table on page 10, you will see that the deadline for submitting the TRAC 2020-21 return is 31 March 2022. Therefore, as before, would you mind asking your contacts in HMRC’s Partial Exemption team if they would agree to an option for deferment of the 2021 PE Annual Adjustment to the April 2022 VAT Return, where the calculation relies on or uses TRAC?
HMRC have confirmed the following in an email of 16 September 2021:
I can confirm that HMRC will accept a deferment of the Annual Adjustment to the April 2022 VAT return for the circumstances you cite below (TRAC calculations availability). This will be limited to the adjustment due for the tax year which ended in 2021. Subsequent longer period adjustments will return to being due in the tax period ending 31st January.
For anyone who will be utilising this deferment, they must inform HMRC of their intentions on a per customer basis through the sector mailbox. To note, this does not constitute a proposal for a new PESM but is required to ensure our records remain up to date and accurate as to the timing of the adjustment.
