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VAT Presentation to FASIG
Liz Shillingford - VAT Accountant
18 March 2008
Presentation objectivesPresentation 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 AptosVAT codes on Aptos(Tax specifications)(Tax specifications)
For Sales• ST - Standard rate • ZE - Zero rated • EX - Exempt • OS - Outside the scope of VAT
Taxable supplies
Non taxable supplies
Type of supply determines VAT Type of supply determines VAT treatment of expendituretreatment of expenditure
Taxable supply = VAT fully recoverable
Non taxable supply = VAT not recoverable
Mixed supply = VAT partially recoverable
VAT codes on AptosVAT codes on Aptos(Tax specifications)(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 AptosVAT codes on Aptos(Tax specifications)(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?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 & figuresFacts & 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
That’s an average of £468,529 per year or £117,132
per quarter
Sales – common problemsSales – 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 problemsPurchases - 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 cont’dPurchases cont’d
• 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 UKPurchases 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 mattersGetting 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 informationFurther information
Further information can be obtained from:
• Liz Shillingford
Email: [email protected]
Tel: extn 3098
• VAT Handouts – available on Finances Services,
VAT web page
• HM Revenue & Customs
website: www.hmrc.gov.uk
