VAT and Sales
For help/advice on VAT
please email Corporate Accounting
on VAT@exeter.ac.uk
Room 253, Northcote House
General Overview
VAT is a tax on consumer expenditure. It is collected on business transactions, imports and acquisitions. VAT is a tax charged
on most business transactions made in the UK and is governed by the VAT Act 1994. It is also charged on goods and some
services imported from places outside the European Union and on goods and some services coming into the UK from the other
EU countries. VAT will be added as necessary by Finance for these purchases.
There are three rates of VAT in the UK:
 20% (standard rate);
 5% (reduced rate); and
 0% (zero-rate).
No VAT is charged on taxable supplies made by a business which is not, and not required to be, registered for VAT. These are
known as ‘outside the scope’ supplies.
VAT and the University
The University pays a large amount of VAT that is non-recoverable. Our aim is to help maximise recovery of VAT through
accurate coding. It is very important that the correct code is used as it has a direct impact on the amount of partially
recoverable VAT that is recovered across the whole University.
Sales Invoices
When entering sales invoices you will be required to enter a VAT code (these are known as Tax Specifications within Aptos).
These codes are entered in the product code field on invoice entry. VAT codes which should be used are as follows:
Product Code
E
O
Z
S
S
Tax Spec
EX
OS
ZE
RT
SR
Details
Exempt from VAT
Outside the scope of VAT
Zero rated VAT
Reduced rate VAT
Standard rated VAT
Please see the flowchart overleaf for assistance in selecting the correct VAT treatment.
Cash Sales
If you are receiving cash, which is for a taxable activity, e.g. staff catering, then this should be credited directly into an account
code (via Cashiers, Finance Services) but must use a subjective 2 code ending in “V”.
These “V” codes are for VAT inclusive income and will have the VAT element stripped out once a quarter and the net amount
credited to the same code ending in “0”.
VAT inclusive income codes go in pairs e.g. F99-00V Sundry income vat inclusive and F99-000 Sundry income (net amount).
Overseas Sales
If the place of supply of services is outside the UK then it is outside the scope of UK VAT. Certain services which are supplied in
the UK will attract standard rate VAT even if the customer belongs outside the UK, e.g. Hotel accommodation and exhibition
stands. For further information please refer to VAT – Sales & Purchases outside the UK before raising the sales invoice, or
contact the Corporate Accounting team.
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Flowchart to assist with the VAT treatment of Sales (excl Research Projects)
Is there a supply?
Is the customer getting goods or
services in return for payment?
Sales to other areas of the University
are not supplies for VAT purposes
No
Yes
This is a non-business activity. It
is outside the scope of VAT
and input tax is nonrecoverable.
Is the supply to an overseas
body
/organisation/company?
No
Yes
Where does the customer
belong for VAT purposes ?
UK
EU
Other
overseas
Is the supply performed for a person in
a business?
Is the supply Exempt
from VAT?
(The customer should be able to
provide a VAT number or letterhead to
prove that they are in business)
Yes
No
No
Exempt
Related input
tax is non recoverable
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Taxable
Standard rated
input tax is fully
recoverable
Standard rated
input tax is fully
recoverable
Yes
Zero-rated input
tax is fully
recoverable
Examples of which VAT codes to use when raising sales invoices
EX - Exempt from VAT
Education – Education or training provided by schools, universities and other ‘eligible bodies’, and supplies of research by one
eligible body to another.
The supply of any goods and services which are closely related to the supply of education, research or vocational training is
exempt, provided they are for the direct use of the pupils, students or trainees. Closely related goods and services would
include, but not be limited to, accommodation, catering, course materials and field trips.
Conferences, short courses, seminars – as education, above
Accommodation to students
Catering to students
Letting of rooms (other than for accommodation)
Insurance
RT - Reduced rate VAT
Domestic fuel or power
Installation of energy saving materials in residential or charitable buildings
Women’s sanitary products
ST - Standard rate VAT
Accommodation (other than to students)
Catering (other than to students)
Consultancy
Conference stands
Postal services – charged externally
Wines, beers & liquor (including internal supplies)
Supply of staff
Supplies of most goods and services
ZE - Zero-rate VAT
Publications
Library membership
OS - Outside the scope of VAT
Internal invoices (except wines, beers & liquor which are standard rated).
Recovery of expenses - where there has been no supply
When the place of supply of services is outside the UK
Further information can be obtained from:
HM Revenue & Customs website: www.hmrc.gov.uk
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