VAT

Presentation to FASIG

Liz Shillingford - VAT Accountant

18 March 2008

Presentation objectives
Explain VAT codes on Aptos
Explain partial exemption
Sales & Purchases - common problems
Increase overall general awareness
Increase accuracy of coding on invoices

VAT codes on Aptos

(Tax specifications)
For Sales
ST - Standard rate
Taxable supplies
ZE - Zero rated
EX - Exempt
Non taxable
OS - Outside the scope of VAT
supplies

Type of supply determines VAT

treatment of expenditure
Taxable supply

VAT fully recoverable

Non taxable supply

VAT not recoverable

Mixed supply

VAT partially recoverable

VAT codes on Aptos

(Tax specifications)
For purchases
SR - Standard rate, fully recoverable
SN - Standard rate, non recoverable
SP - Standard rate, partially recoverable
You should only see one of these per account code
Determined by supply made/income source

VAT codes on Aptos

(Tax specifications)
For purchases
ZE - Zero rated
EX - Exempt
OS - Outside the scope
End result is the same - no VAT
but they are not the same

What is partial exemption?

The University is partially exempt because it
makes both taxable and exempt supplies
It can claim a proportion of the VAT incurred on
mixed supplies
University has an income based method
Taxable sales = percentage recoverable
Total sales
Percentage applied to partially recoverable VAT

Facts & figures

2006/07
Amount of partially recoverable VAT recorded
with SP was 4,246,360
Actual amount we recovered was 630,328
The amount of VAT paid to HMRC through our VAT
returns over the last 5 years has been 2,342,645
Thats an average of 468,529 per year or 117,132
per quarter

Sales common problems

Ensure correct VAT code is used
Internal sales are outside the scope of VAT
(with the exception of liquor sales HS only)
If there is no supply then no VAT should be
charged, e.g. recovery of expenses or grant
income
See separate handout on VAT and Sales

Purchases - common problems

VAT inclusive invoices
VAT must be split out
VAT fraction is 7/47 of total amount
Mixed supply invoices
Enter a separate line for each change in
tax rate
Do not enter total amount using OS
and ignore the VAT completely

Purchases contd
VAT only invoices
Ensure VAT is entered in VAT box
Dummy lines will have to be used to enter a line
with VAT and credit line without VAT. Credit line
should be OS
Internal purchases are outside the scope of VAT
(incl B&E invoices which show VAT)
See separate handout on VAT and Purchases

Purchases from outside the UK

Ensure you give our VAT number to avoid
being charged foreign VAT that we cannot
recover
Liable for UK VAT
Our VAT number is GB 142 0477 95
See separate handout on VAT and Purchases
from outside the UK

Getting it right & why it matters

Correct coding of purchases will allow more
VAT to be recovered
Correct coding of supplies will increase taxable
sales
Increased taxable sales = larger partial recovery
percentage
Larger percentage = more VAT claimed back

Further information
Further information can be obtained from:
Liz Shillingford
Email: E.E.Shillingford@exeter.ac.uk
Tel:
extn 3098
VAT Handouts available on Finances Services,
VAT web page
HM Revenue & Customs
website: www.hmrc.gov.uk