Is there a supply for VAT purposes?

Although VAT is chargeable only when a taxable supply is made, it is just as important to understand the nature of, and code correctly, all transactions. For example, if the University undertakes a piece of research, provides consultancy or delivers an educational course, then the payment that we receive in return is linked directly to the provision of that service.

 
The following are examples of ‘supplies’ for VAT purposes;

 

  • Undertaking research for a commercial body
  • Carrying out consultancy
  • Sales and services provided on a commercial basis

 

There is no supply in the following cases;

  • Grants for the general benefit of society as a whole or the University in particular; examples would be grants to improve University facilities or to widen participation.
  • Donations; provided such money is given freely, with no requirement upon the University to provide anything, such as advertising the donor, there is no supply;
  • Inter-departmental charges; In the VAT sense, ‘supply’ relates only to something done for someone external to the University. Charges between departments are always disregarded for VAT purposes.

The same principle applies to certain types of payment we make. Specific examples include;

  • Redistributions of Grants; for example where we receive monies for onward transmission to students.
  • Distance Learning; where the course, the course material and the students are located overseas.

Income and expenditure which is ‘outside the scope of VAT’ should be coded ‘0’ for VAT purposes.

Determining whether there is a supply for VAT purposes can be complex. If you are in any doubt contact Anne-Marie Roberts on extension 6199 for specific advice. Or email anne-marie roberts@stir.ac.uk

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