Professional Documents
Culture Documents
FINANCE OFFICE
3 July 2012
VAT to Basics
Roger Bennett University Tax Manager
www.le.ac.uk www.le.ac.uk
of
UK Rates (taxable)
20% standard rate 5% reduced rate 0% zero rate
Rates of Tax
Standard Rate - 20%
Majority of goods and services Increased to 20% on 4th Jan 2011
Reduced Rate - 5%
Domestic fuel and power Children's car seats
Zero Rate
Select group of goods and services
Some food (Groceries) Books and newspapers Childrens clothing Public transport Some equipment for the disabled Certain purchases made by a charity
VAT Exempt
Some goods and services are exempt as it is considered inappropriate to tax them
Health Education Financial Services
Purchase invoices
VAT code depends on the rate we have been charged and we can also recover the VAT
A Quick Guide
Income VAT code Outside the Scope VATable Supply Zero Rate Supply Exempt Supply EU Export Y6 YS Y3 Y1 Y4 (Goods) Y5 (Services) Expenditure VAT code T3 T2 T2 T3 T2
EU Import
We collect this VAT and pay it to HMRC as part of the quarterly VAT return
Education (Exempt)
Tuition fees
Short courses and workshops Academic conferences Hire of rooms to external organisations Medical diagnosis and treatment
Purchase Invoices
Recovery status of VAT
Input VAT (VAT on purchase invoices) can be fully recoverable, partly recoverable or nonrecoverable Recovery status depends on what the purchase has been used for
VAT code is T2
VAT code is T3
VAT code is PS
Full
details
on
HMRC
website
(http://www.hmrc.gov.uk/charities/vat/charity-funded.htm)
The University must account for VAT at the rate the supply would attract if supplied in the UK, eg consultancy, financial advice, supply of staff, electronic services
Question Time!
We do not charge VAT on tuition fees, educational conferences, and hire of rooms.
What VAT code do we use to raise the sales invoice?
We have supplied consultancy and are charging the standard rate (20%) VAT.
What VAT code do we use to raise the sales invoice?
We are supplying books. Books are zero rated therefore we are not charging VAT.
What VAT code do we use to raise the sales invoice?
HMRC website helpful for detailed VAT rules - use search or look under charities or education section
http://www.hmrc.gov.uk/