A recharge occurs when the initial supply of goods/services was between the supplier and the University. The University then recovers all or part of the costs from a third party. This recovery is a new supply by the University to the third party.
The key indicators that this is a recharge of goods or services are:
In these cases the source of funds will always be GAAA, an appropriate L transaction code should be used and the VAT liability of the supply to the third party will be determined by the nature of the onward supply. See sections Sales/Income in the UK [1] and Sales to the Rest of the World [2] for VAT rates on supplies.
Common examples of this are the use of the photocopier and private use of the telephone. On each occasion there is a supply of goods or services to the individual and the VAT will be dependent on what the supply is and who it is to. See Sales/Income in the UK for VAT rates on supplies.
Sometimes private purchases are made by staff through the University so they can benefit from the discounts that the University receives from the supplier, e.g. computers, office supplies. This is allowed but the full cost to the department (including an administrative charge to cover the processing costs) must be charged to the individual.
If the University is invoiced for the goods then there are two supplies:
The full value of the income will be standard-rated unless the item can be specifically zero-rated as in the case of books. See Sales/Income in the UK for VAT rates on supplies.
If this is part of an overall charge by the University to the third party for the services of an employee e.g. for a talk or lecture, the VAT rate is determined by the type of supply and who it is to. See Sales/Income in the UK [1] for VAT rates on supplies.
If there is no fee paid other than the travel costs see Reimbursement of travel expenses by a third party [3] - no fee for services for further guidance.
Links
[1] https://www.finance.admin.cam.ac.uk/policy-and-procedures/financial-procedures/chapter-9-vat-and-other-taxes/salesincome-uk
[2] https://www.finance.admin.cam.ac.uk/policy-and-procedures/financial-procedures/chapter-9-vat-and-other-taxes/sales-customers-outside-uk
[3] https://www.finance.admin.cam.ac.uk/policy-and-procedures/financial-procedures/chapter-9-vat-and-other-taxes/common-errors-treatment-vat