VAT elearning for HEIs Managing risk and cost through knowledge and awareness

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1 VAT elearning for HEIs Managing risk and cost through knowledge and awareness Updated for 2016 Summary Deloitte Learning and our team of education sector VAT specialists have worked together to create a unique suite of engaging and interactive e-learning modules on the subject of VAT in HEIs. First launched in 2014, a refreshed version of the package is now available for Using leading-edge instructional design techniques and real life examples the modules will be invaluable to help educate HEI staff who make VAT decisions. The four interlinked but detachable modules cover: Module 1: Introduction to VAT for HEIs. Why should HEIs buy VAT e-learning? The UK operates a system of self-assessment for all taxes and so universities, like all other taxpayers have an obligation to file accurate returns. Failure to do so could result in substantial penalties and/or overpayment of taxes. A key feature of HMRC s review procedures is to ensure that taxpayers offer their staff making tax decisions adequate training. VAT e-learning is a high quality, low cost, time efficient way to offer staff this training and the monitoring facility provides an audit trail to demonstrate compliance. Module 2: The VAT treatment of HEI Income. Module 3: Recovery of VAT on HEI Expenditure. Module 4: VAT for HEI Research activities. The modules are designed to create awareness of VAT and help staff to understand the implications of their actions for VAT and VAT accounting. Courses are accessed by users directly from Deloitte s online portal. Modules start around 600/module per HEI and they can be purchased individually or as a package. What s new for 2016? Refreshed question banks for each of the four VAT modules. VAT Hot Topics sections included in modules 3 and 4 to give staff an understanding of the latest developments and changes in VAT. New and flexible pricing structure based on number of user access required allowing HEI s more flexibility around elearning subscriptions.

2 Testimonials The current population of users of the HEI e-learning offering has provided overwhelmingly positive feedback. Below is a selection of the comments received: I have found the Deloitte/BUFDG VAT e-learning package to be an extremely useful and interactive tool for our university, suitable for finance and non-finance staff alike. I thought the contents of the modules was appropriate and relevant to the educational sector. Thanks for visiting us yesterday, we were very impressed by what we saw of the modules. I would strongly recommend the VAT e-learning package to any HE Finance Director wishing to mitigate VAT risks throughout the university and to enable the finance team to be freed up to tackle the more complicated VAT issues. I believe it will be a very useful tool for our finance staff. The training provides just the right amount of technical content for non-finance staff to inform them of key VAT issues. Feedback from within the University is that it is pitched and presented at the right level and we have found that it has really helped us to develop an increasing awareness of the specific VAT issues faced by the HE sector. Pricing List (per annum, exclusive of VAT) No. of users Module 1 (Introduction to VAT for treatment of HEI Income) Module 2 (The VAT Treatment of HEI Income) Module 3 (Recovery of VAT on HEI expenditure) Module 4 (VAT for HEI Research) Modules 1-3 All Modules ,137 1, ,393 2, ,176 1, ,475 2, ,303 1, ,618 2, ,437 1, ,888 3, ,665 1, ,213 3, ,881 1, ,630 4, ,200 2,400 2,400 1,200 4,537 5, ,440 2,561 2,561 1,280 5,445 6,348 5 Additional users* ,196 1,278 *for existing subscribers only Price includes: monitoring reports for up to the specified number of users (as above); certification to specified number of users on completion of each module; update for key legislation, case law or HMRC guidance every 6 months; refresh of modules every 12 months to allow for ongoing re use. Discounts: 15% off all modules purchased for three year subscription. Extras: Customisation 600 per module up to 2 slides of university specific content. Options: VAT codes. Reference to particular income or expenditure types. Historic/factual context. Renewal pricing: For HEIs renewing their subscription the pricing above applies but will be based solely on the number of users (the turnover criteria will not apply). This will give more flexibility to renewing HEI s to determine the appropriate number of licences required in the second and subsequent years. An early bird 10% discount to the above pricing will also apply on renewal where the renewal is confirmed within one month of expiry.

3 Key features and customisation The key features of the modules include the following: four integrated modules which can be used to build a tailored training program to meet the needs of individual staff; the VAT content has been developed jointly using sector expertise and our team of VAT specialists and so is directly relevant to HEIs; the E-learning methods are developed by Deloitte s in house experts to ensure maximum user engagement and retention; Who is it relevant for? The modules are relevant for all staff who make VAT decisions this will include but is not limited to: The central finance team. Accounts payable. Accounts receivable. The procurement team. Departmental or faculty operations and/or finance and administration staff. each module includes user assessment/certification; and there is an additonal option for HEIs to engage with Deloitte to customise one or more of the modules to cover the HEI s accounting systems. Options including cost or income VAT codes, more detail on specific income or expenditure types, or historic or factual context. Monitoring The HEI will be able to appoint individuals to monitor reports on usage which will identify: the users of each module; the status of progress including number of module attempts, and time taken; and the scores achieved. These will be provided to the HEI subscriber on request.

4 Content and features (Note items in green are examples of customisation) Module 1 Introduction to HEI VAT (30 mins) Learning objective: Understand how VAT works and its impact/relevance to the HEI. Core learner base: Finance professionals, AP/AR processing staff, clerical/administrative staff. Basic facts about VAT Brief history of VAT Reference to which countries are within the EU Registration all HEIs are registered, some suppliers may not be HEIs mainly exempt/non business implications VAT is a cost Key university data PX rate, cost Relevance of incorrect VAT for HEIs: HMRC penalties/reputation damage Increased cost Charity/regulation VAT return how income and expenditure flows through to VAT return The VAT cycle to demonstrate the idea of being a train of transaction, paying and recovering VAT, and the distinction between other businesses and HEIs Module 2 Income (1 hour) Learning objective: Understand and explain the VAT treatment that applies to HEI income and the key compliance requirements. Core learner base Finance professionals, AR processing staff, clerical/administrative staff. When is a transaction within the scope of VAT, with a particular focus on the business test Income received by HEIs explanation of key examples such as grant funding etc Where sales are within the scope of VAT, overview of the different liabilities Income codes university specific Education exemption: Criteria Eligible body status Categories of exempt education Related goods and services Liability of key sales income, including catering, conferences, sports, etc. Compensation payments (reference to damage to halls) International supplies of services: Basic place of supply rules, including common supplies by HEIs following this Main exceptions, including common supplies by HEIs falling within these VAT treatment where the place of supply is outside of the UK (including checking the customer s VAT number) Risk of breaching overseas registration thresholds VAT invoice requirements VAT invoices for UK customers 250 rule International goods/services Tax points, with a focus on when invoices for services should be raised Hot topics Spin off activities closely related to education 2015 Place of supply changes

5 Module 3 Expenditure (1 hour) Learning objective: Understand and explain the VAT treatment that applies to HEI expenditure and the key compliance requirements. Core learner base Finance professionals, AP processing staff, clerical/administrative staff. Overview general limitations on VAT recovery Key issues/requirements for input VAT recovery: valid VAT invoice requirements Purchase cards Foreign VAT Overview of partial exemption ( PX ) How PX works Attribution direct vs residual Importance of coding of expenses for PX purposes Expenditure codes university specific Common expense items overview Zero rating reliefs available to eligible bodies: Advertising Medical/research Services purchased from overseas suppliers applying the reverse charge where the place of supply is the UK key examples Goods purchased from overseas Hot Topics Cost sharing exemption VAT treatment of ebooks Pension costs Module 4 Research Learning objective: Understand and explain the VAT treatment that applies to Research. Core learner base Specialist research staff, administrative staff, and potentially a few interested academics. What is research (comparison to consultancy services and to testing/analysis) Research business or non business Eligible body to eligible body treatment/changes Single entity v collaborative research, grant funding applications by multiple bodies Place of supply of research services Recovery of input VAT relating to research depending on whether it is business or non business Reliefs available for non business research Intellectual property VAT considerations where this is transferred to spin out companies

6 Contacts National E learning Lead Ben Powell bpowell@deloitte.co.uk National E-learning Manager Athira Vijayakumar avijayakumar@deloitte.co.uk UK Education Tax Leads Laurie Pay lpay@deloitte.co.uk Jack Stoakes jstoakes@deloitte.co.uk North Stuart Savage ssavage@deloitte.co.uk London Simon Atkins siatkins@deloitte.co.uk South West and Wales Kate Connolly kaconnolly@deloitte.co.uk Scotland & Northern Ireland Alistair Duncan alduncan@deloitte.co.uk Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ( DTTL ), a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of DTTL and its member firms. Deloitte LLP is the United Kingdom member firm of DTTL. This publication has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Deloitte LLP would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances. Deloitte LLP accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication Deloitte LLP. All rights reserved. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom. Tel: +44 (0) Fax: +44 (0) Designed and produced by The Creative Studio at Deloitte, London. J3835