University of Cambridge VAT

University of Cambridge VAT

The University is registered for VAT and hence is as a “taxable person”. Our VAT registration number is 823 8476 09.

It is also an exempt charity. As an exempt charity it has no charity number. Anyone requesting the number should be advised that we are an exempt charity under Sch 3 of the Charities Act 2011.

The University generates income which may be outside the scope of VAT, VATable, zero-rated or exempt, and cannot normally recover VAT it has had charged on its’ purchases, which therefore makes the VAT charge an additional cost.

This can make the VAT issues in the University complicated and difficult to understand.

University Income

The University is a “taxable person” and as such has to add VAT on to the sale price of all standard rated and reduced rate business transactions it enters into. It does not have to add VAT where the income is “outside the scope” of VAT or if it falls under one of the categories for VAT exemption or zero-rating.

E.g. The University sells a second hand computer to a member of staff

  • It’s within the scope of VAT because money has been received in return for goods
  • There is no exemption or zero-rating available for the sale of a computer to a member of staff

Therefore the sale is standard rated and VAT must be added to the price.

However, much of the income received by the University is either:

  • Not received in the course of business e.g. research council and charitable research grants and is therefore outside the scope of VAT; or
  • Qualifies as being “exempt” from VAT as it is a supply of education.

Where VAT is charged on a supply by the University, the VAT is being collected on behalf of HM Revenue and Customs (HMRC). At quarterly intervals the University pays HMRC the total amount it has collected on their behalf.

E.g. A University department raises an invoice for £1000 plus £200 VAT making a total of £1,200.

  • The University department will receive the £1000
  • The accounting system allocates the £200 VAT to a separate account so that it can later be transferred to Revenue and Customs.

More detail on the VAT treatment of University income is given in section Sales/Income in the UK, Sales to Members of the EC, Sales to Rest of World and Common Errors in the VAT treatment of income.

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