When to use : When income is for the supply of an exempt service. In the University this mainly concerns the following supplies:

Transcription

1 VAT Codes AO - Output VAT Exempt When to use : When income is for the supply of an exempt service. In the University this mainly concerns the following supplies: 1. Education 2. Supplies to students related to the supply of education 3. Property rental 1. Education: Course fees, educational conferences, vocational training, case awards, examination and validation fees. 2. Supplies to students related to the supply of education: Accommodation, catering (not bar sales and confectionery), photocopying, sports facilities, and equipment required for their course of education. 3. Property rental: Rents, room hire and hire of stand at an exhibition. A2 - Output VAT 0% (Zero rate) When to use : The supply of certain goods and services are zero rated. In the University this mainly concerns the following: 1. Printed matter 2. Supply of medical, scientific or laboratory equipment to an eligible body for medical research. (Note customer should supply a VAT Relief certificate) 3. Goods exported outside the EU. 1. Printed matter: Books, brochures, manuals, journals, subscription to a journal, maps, printed music (NB not posters, questionnaires etc.). 2. Supply of medical, scientific or laboratory equipment to an eligible body for medical research. (Note customer should supply a VAT Relief certificate): In this instance an eligible body is a University or other charity engaged in medical research or training. A3 - Output VAT 0% EU Goods When to use : When goods are sold to an EU customer - the customer must supply their VAT registration number otherwise treat the same as a UK customer. All goods which are physically exported to other EU member states to customers who supply us with their VAT registration number which must be written on the sales invoice. A4 - Output VAT 0% overseas services When to use : When services are provided to a customer outside the UK. Note - If an EU customer does not provide a VAT registration number they should be treated as a UK customer. Examples: Commissioned research, advertising, consultancy, data processing, supply of staff, maintenance of a database, software licences and other similar services to an overseas customer

2 A6 - Output VAT 5% (Reduced rate) When to use : Supply of fuel and power for domestic use Where utility charges are being made to tenants both student and non-student. A7 - Output VAT 20% (Standard rate) When to use : To be used when receiving income in return for the supply of goods or services which are not exempt or zero rated 1. Commissioned research. 2. Sales of Videos, compact discs, stationery, equipment, photographs, computer hardware, computer software, souvenirs and merchandise. 3. Advertising income, authoring, editing, consultancy, hiring out of equipment or facilities, testing, analysis, staff recharges, membership of database, literature searches, software development and translation. 4. Sponsorship: Where the sponsor receives some benefit in return for making a contribution. A8 - Non Business When to use: Grant income where there is no supply to the funder Examples: When to use : 1. Research grants from charities and government bodies are usually non business (see under Research in Financial Procedures) 2. EU grants 3. Pass through funding from and to collaborators A9 - Output VAT not relevant When the transaction is not relevant for VAT 1. Intra group supplies are sales to companies within the University VAT group, namely the Farm. 2. Inter departmental supplies are transfers between departments providing goods or services.(note if you are journaling a cost to another cost object you should do so using the same VAT code as on the original purchase)

3 IO - Input VAT - zero or not charged When to use : Where the invoice does not charge VAT because: 1. The supplier is not registered for VAT 2. Payment is for goods or services that are not liable to VAT 3. The payment is for goods or services liable to VAT at 0% 1. The supplier is not registered for VAT: Normally small traders. 2. Air fares, rail travel 3. Books and journals. IA - Input VAT zero rate relief When to use : The payment is for goods where VAT relief has been applied for, a certificate should be sent to the supplier (see Financial Procedures). Medical, scientific or laboratory equipment for use in medical research or training. IB - Input VAT zero rate relief When to use : The payment is for goods where VAT relief has been applied for, a certificate should be sent to the supplier (see Financial Procedures). Substances for use in medical research. IC - Input VAT zero rate relief When to use : The payment is for goods or services where VAT relief has been applied for, a certificate should be sent to the supplier (see Financial Procedures). Advertising in a journal, on a billboard, on TV or radio and on somebody else s website but not a University website. ID- Input VAT zero rate relief When to use: Examples: Payment is for goods or services when VAT relief applies as in IA, IB, & IC and order is placed on Science warehouse. Medical, Scientific and Laboratory equipment for use in medical research or training; substances for use in medical research; charity advertising.

4 SR - Input VAT 20% and recoverable When to use : The supplier charges VAT at the standard rate and the University can recover it from HMRC. This is the case where goods or services acquired are wholly attributable to a Taxable supply. 1. Equipment or services purchased for a taxable research contract. 2. Computer purchased and used 100% for consultancy work. 3. Costs related to producing a book or journal. SP - Input VAT 20% and partly recoverable When to use : The supplier charges VAT at the standard rate and the University can partly recover it from HMRC. This is the case where goods or services acquired are attributable to a mixture of recoverable and partly recoverable activities. 1. Goods purchased for a store providing for taxable and non taxable research projects. 2. Costs incurred in a faculty administration office. 3. Maintenance costs of academic and administration buildings. SN - Input VAT 20% and not recoverable When to use : The supplier charges VAT at the standard rate and the University cannot recover it from HMRC. This is the case where goods or services acquired are wholly attributed to a non Taxable supply. 1. Equipment or services purchased for a non business research project. 2. Costs relating to an educational conference. 3. Expenses incurred relating to teaching. R1 - Input VAT 5% and recoverable When to use : The supplier charges VAT at 5% and it is recoverable from HMRC by the University. VAT on fuel and power supplied to RRP or RCP buildings is charged at 5%. It is recoverable when it is a separate supply which is then recharged as a utility charge to tenants of University properties. R2 - Input VAT 5% and partly recoverable When to use : The charges VAT at 5% and it is partly recoverable from HMRC by the University of Leeds. VAT on fuel and power supplied to RRP or RCP buildings is charged at 5%. The input VAT is partly recoverable where the supply relates to a building(s) that has a mixed use.

5 R3 - Input VAT 5% and not recoverable When to use : The supplier charges VAT at 5% and it is not recoverable from HMRC by the University. VAT on fuel and power supplied to RRP or RCP buildings is charged at 5%. The input VAT is not recoverable where there is a separate supply to a building with no taxable outputs. E0 - Input VAT - EU acquisitions 0% which if purchased in the UK would be zero rated. Books and journals purchased from a supplier in an EU member state. ER - Input VAT recoverable - EU acquisitions which if purchased in the UK would be SR. Remember to give the University VAT registration number to avoid being charged VAT in the country of origin. 1. Equipment purchased for a Taxable research contract. 2. Computer purchased and always used for consultancy work. EP - Input VAT partly recoverable - EU acquisitions which if purchased in the UK would be SP. Remember to give the University VAT registration number to avoid being charged VAT in the country of origin. Vat will be payable at the standard rate in the UK and charged to the same cost object as the goods. 1. Goods purchased for a store providing for taxable and non taxable research projects. 2. Equipment purchased to be used for both teaching and providing consultancy services commercially. EN - Input VAT not recoverable - EU acquisitions which if purchased in the UK would be SN. Remember to give the University VAT registration number to avoid being charged VAT in the country of origin. Vat will be payable at the standard rate in the UK and charged to the same cost object as the goods. 1. Equipment or consumables purchased for a non business research project. 2. Purchases of goods used in teaching activities. X0 - Input VAT Imported goods When to use : Use for goods being purchased and delivered from a supplier outside the EU Any equipment or other goods imported from outside the EU. Note Import VAT and duty may be payable to the freight carrier.

6 Foreign Services *Certain services are treated as supplied where the customer belongs. As a result, where such services are purchased by the University from any supplier outside the UK, we are required to account for VAT on the purchase as if the service had been bought in the UK. Examples of the services to which this applies are: Advertising services, Research services, Data processing and provision of information, Custom made software, Supply of staff, Purchase of a licence, Services of consultants, engineers, lawyers, accountants and other similar services FR - Input VAT recoverable - Foreign services When to use : Use for certain services* being purchased and delivered by an overseas supplier which are wholly attributable to a taxable supply. Research services provided to the University by an American company for use in a commercially sponsored research contract. FP - Input VAT partly recoverable - Foreign services When to use : Use for certain services* being purchased and delivered by an overseas supplier which are attributable to a mixture of taxable and non taxable activities. Software development of system for use by Research and Innovation Services supplied by a German company. FN Input VAT not recoverable- Foreign services When to use : Use for certain services* being purchased and delivered by an overseas supplier which are wholly attributable to non taxable activities. 1. Granting of a licence by an Australian company to use their training package. 2. Fees paid to an individual in India collaborating on a grant funded research project. I9 - Input VAT not relevant When to use : When the charge is not relevant to VAT 1. Intra group purchases from companies within the University VAT group, namely the University Farm. 2. Inter departmental purchases are transfers from departments providing goods or services.(note if you are journaling a cost to another cost object you should do so using the same VAT code as on the original purchase)