VAT rates

In some cases, both when goods/services are supplied to the University (purchases), or when goods/services are supplied by the University (sales), it may be necessary to determine whether VAT is applicable and if so at what rate. The following guidelines should assist you in this determination.

1. Is the transaction within the scope of UK VAT?

In order to be within the scope of UK VAT a transaction must have all of the following characteristics -

(i) There must be consideration paid in return for a transfer of goods or services

(ii) The supply takes place in the UK

(iii) The supply is made by a VAT registered (taxable) person

(iv) The transaction is in the course or furtherance of business

If any of these criteria are not present the transaction will be outside the scope of UK VAT.

If all above characteristics do apply to a transaction, the following procedure will determine whether that transaction is taxable and at what rate, or exempt:  

2. The transaction is within the scope of UK VAT, is it taxable (and if so, at what rate?) or exempt?

It should be noted that there is no list of taxable standard rated items. A good or service will be standard rated unless it is identified as zero rated or exempt under the above procedure.

Establishing VAT rate

Nb. A small number of goods/services are taxed at a reduced rate of VAT (currently 5%). These supplies should not in general affect the majority of people in the University, and have been omitted from discussion above in order to simplify the process described.