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VAT Presentation to FASIG

VAT Presentation to FASIG. Liz Shillingford - VAT Accountant 18 March 2008. Presentation objectives. Explain VAT codes on Aptos Explain partial exemption Sales & Purchases - common problems Increase overall general awareness Increase accuracy of coding on invoices.

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VAT Presentation to FASIG

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  1. VATPresentation to FASIG Liz Shillingford - VAT Accountant 18 March 2008

  2. Presentation objectives • Explain VAT codes on Aptos • Explain partial exemption • Sales & Purchases - common problems • Increase overall general awareness • Increase accuracy of coding on invoices

  3. VAT codes on Aptos(Tax specifications) For Sales • ST - Standard rate • ZE - Zero rated • EX - Exempt • OS - Outside the scope of VAT Taxable supplies Non taxable supplies

  4. Type of supply determines VAT treatment of expenditure Taxable supply = VAT fully recoverable Non taxable supply = VAT not recoverable Mixed supply = VAT partially recoverable

  5. VAT codes on Aptos(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 codeDetermined by supply made/income source

  6. VAT codes on Aptos(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

  7. 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

  8. Facts & 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

  9. Sales – 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

  10. Purchases - 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

  11. Purchases 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

  12. Purchases 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

  13. Getting 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

  14. Further information Further information can be obtained from: • Liz Shillingford Email: E.E.Shillingford@exeter.ac.uk Tel: extn 3098 • VAT Handouts – available on Finances Services, VAT web page • HM Revenue & Customs website: www.hmrc.gov.uk

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