For those that didn't see this.
The following is the information posted on the following website,
http://www.ad.ic.ac.uk/finance/manual/vat.htm.
Value Added Tax - VAT
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1.1 Value Added tax is a tax on sales, which has to be paid ultimately by the
consumer.
1.2 As its name suggests, the tax is levied on the value which is added to
the goods or services in question at each stage in the production and
distribution process. This is achieved by levying tax at each point en route,
as ownership passes from one person to another. At every stage, "output" tax
is charged on the current sales value, but the "input" tax which has been
charged by those at an earlier stage of the game can be offset or recovered.
Thus the tax liability at each stage is based on the difference between the
value of the outputs and the value of the inputs (hence "added value".)
1.3 Needless to say, this simple concept is set about with exceptions,
exemptions, variable rates of tax, special rules on exports and imports
within and without the European Union, and so on and so forth.
Registration
2.1 All bodies, companies and individuals whose supplies of goods and/or
services exceed a prescribed limit (currently �47.0K per annum) must register
for VAT with Customs and Excise.
2.2 Registrants must comply with VAT regulations, which have been approved by
Parliament, and account promptly for monies owing. The penalties for evasion
or negligence are severe. Institutions can be fined, and be assessed for
additional tax to the value of thousands of pounds for comparatively small
misdemeanours. Individuals, including employees, can in extreme cases, be
imprisoned when evasion is shown to be deliberate.
2.3 The College's registration number is GB 649-9266-78.
Classification of Transactions
Purchases
Sales
RECOVERY OF INPUT TAX PAID ON PURCHASES
6.1 Where the College makes a taxable sale (including a zero-rated one) it is
entitled to recover any tax paid to its suppliers on purchases directly
linked to the sale. For example, if a department constructs a specialist rig
or prototype for an external customer, the sale of the item will be subject
to VAT. If it incorporates bought-in components, which were themselves
subject to VAT at the time of purchase, then this amount of VAT will be
recoverable from HM Customs. In order to effect recovery, details of the
bought-in components should be submitted to the Finance Division (preferably
with photocopies of the incoming invoices) at the time that the Sales Invoice
Request is submitted (see paragraph 7.2, below).
6.2 VAT recovered will be credited to the departmental account which
originally bore the cost of the components. If the amount is less than �50,
however, specific recovery is uneconomic and will be disregarded. (The
College also recovers a small proportion of its overall input tax, on a
blanket basis, by negotiating a percentage settlement with HM Customs. This
also benefits departments indirectly, by increasing overall resources
available for distribution through the vote formula.)
Invoicing
7.1 Regular sales points, such as refectory outlets, the accommodation office
and the Sports Centre, will already be aware of their obligations in relation
to VAT.
7.2 Otherwise, all sales made to external customers must be supported by an
official College invoice. This may be initiated by means of Sales Invoice
Request form, FISIC S1.
7.3 Do-it-yourself invoices, using College headed notepaper, are strictly
forbidden and are unlawful.
Enquiries
8.1 To assist departments in the correct treatment of VAT, Brian Devlin
(Credit Controller) and Andy Royle (Assistant Accountant) are willing to
answer queries as they arise.
Russ
