Some products are always charged without VAT, namely:
- Books and e-books
- Human blood and organs
- Insurance
- Non-VAT registered suppliers
- Stamps/franking machine charges
- Travel tickets
In addition, some purchases are usually charged without VAT to the University, these are:
The University is also able to purchase certain items (that would normally have VAT charged on them) without VAT due to its charitable status. These include:
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Please see the additional COVID-19 guidance for additional advice on the purchase of:
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For more details on any of these purchases, and the processing of invoices relating to business entertainment or expenses, please refer to relevant pages in this section.
The code for entering most purchases charged without VAT is 'No UK VAT'. This is irrespective of whether the supply is zero-rated, exempt or outside the scope of VAT.
However, this does not cover medically exempt purchases which should always be entered on CUFS using the tax code ME0% (please see Medically Exempt Purchases).
For purchases from outside the UK, you may have to apply a self-charge VAT. The accounting mechanism and tax codes to use are covered in sections Purchasing Goods from the EC, Purchasing Goods from Outside the EC and Purchasing Services from Outside the UK.
Advertising
As a charity the University can claim VAT relief on certain advertising costs. This includes advertising on any medium which communicates with the public such as television, cinema, billboards, the sides of vehicles, newspapers and printed publications. The important factor is whether the advertisement is placed on someone else's time or space. If it is not there will be no scope for zero-rating. Relief is claimed by giving the supplier the certificate at Appendix D.
Books and E-books
The purchase of some printed items is zero-rated whilst others are standard rated. Since May 2020, electronic versions may also be zero-rated, with a small number of exceptions.
Below is a list of some of the zero-rated items and standard items:
Books (are zero-rated and therefore no VAT is charged on the purchase)
Certain other printed material is also zero-rated including:
- Booklets
- Brochures
- Pamphlets
- Leaflets
- Newspapers
- Journals and periodicals (including magazines)
- Music scores and
- Maps
Electronic publications (E-books) Since May 2020, these are also zero-rated, including:
- E-Books
- E-Booklets
- E-Brochures
- E-Pamphlets
- E-Leaflets
- E-Newspapers and
- E-Journals and periodicals (including magazines)
NB: There doesn’t have to be a printed copy of the publication in existence for this VAT treatment to apply.
Items excluded from zero-rating:
- E-publications that are wholly or predominantly (more than 50%) devoted to advertising, audio, and/or video content
- E-audiobooks
- Digital music manuscripts, maps, and charts
- An e-publication that is predominantly for completing (for example, an electronic diary), unless it is an electronic version of a printed book whose supply is already included within the zero-rate
- E-book readers
- Software (for example, an “app”) used to access e-publications
Open Access
Where research outputs are distributed online via a dedicated open-access publisher, fees payable to the publisher are subject to Standard Rate VAT. If the publisher is based outside the UK, this will be via the reverse charge process (CUFS tax code ‘SERVICES TAX’) – see Purchasing services from outside the UK
Read and Publish
Read and Publish arrangements can differ depending on the specific details. Generally, a charge is made that covers both a publishing fee (standard rated) and a read fee (zero-rated). The specific arrangement and the way in which it is invoiced will influence the VAT liability.
Some publishers have agreed a specific split with HMRC:
If invoiced as 2 separate supplies:
| Publish element | Standard rated |
| Read element | Zero rated |
If invoiced as a single supply, it is likely to be Standard rated.
Business Entertainment
The University is not allowed to recover any VAT on business entertainment and it should not be entered as a separate item on the UFS system, the whole invoice amount should be entered as the gross amount and processed as 'No UK VAT'.
Catering and Accommodation
Catering (see definition at Food) and accommodation is exempt if it is
- provided by a College or another educational establishment to the University, and
- the University will use the supplies for an educational conference or teaching, and
- the catering/accommodation is for the direct use of the student or attendee.
The exemption would not apply where the accommodation is provided by a body that is not a College, even if it is for use by students, or where the use is not by students. The following examples will give you some idea of when educational items can be exempted and when VAT will be charged for them.
- If you held a staff meeting in a college it would be standard rated as the meeting is not for the direct use of students.
- If you organise a conference and the conference provider bills you for rooms, food including wine for the delegates, and charges you for videoing the event.
a. If the conference is at a College then:
i. The rooms and the food would be exempt from VAT as they are for the direct use of the students
ii. The wine would be VATable as alcohol is always standard rate.
iii. The videoing would also be charged at the standard rate of VAT, as it is not for the direct use of the delegates.
b. If the above conference was not booked with a College but through a College subsidiary company or a private company then the whole charge would be standard rated.
Colleges sometimes ask for a certificate to be signed to confirm the University's 'eligible body' status and that the purchases are for the students in association with a conference, before agreeing to exempt the supply.
Construction Services
VAT on construction services – the new domestic reverse charge
With effect from the 1 March 2021 the new Domestic Reverse VAT Charge for Building and Construction Services came into force. This requires the customer rather than the supplier to account for the VAT due on certain construction services. However, this reverse charge is not applicable to supplies made to the University of Cambridge and any VAT due on construction services supplied to us should continue to be charged to us in the normal way by the supplier.
You may be asked to confirm whether the University has ‘end user’ status. Please refer these requests to vatqueries@admin.cam.ac.uk where we can provide a standard response to deal with the University’s charitable status.
Expense Claims
Employee's expenses claims are usually processed as 'No UK VAT' and the VAT not separately identified. There are two exceptions to this.
Where the supply is for a high VAT value and the invoice from the supplier is made out to the University. In this case the expenses claim is processed in the following way:
- The employee completes an expenses claim clearly identifying the VAT charged on the invoice and attaches the original invoice from the supplier
- The University reimburses the employee and processes the payment on CUFS as a SR20% invoice, identifying the VATable item(s) separately.
Where a claim includes foreign taxes and is to be reimbursed from an EC Research Grant (please refer to FPM Chapter 19: Research Grants for further information). These taxes will need to be:
- identified as a separate item line on CUFS;
- coded to somewhere other than the grant; and
- 'No UK VAT' applied to all lines.
Food
Food (not catering) is usually zero-rated and should be entered on CUFS using the tax code 'No UK VAT', but there are a few exceptions on which you will be charged VAT at the standard rate - see section Sales/Income in the UK, Food for standard rated food items.
Goods for the Disabled
Certain supplies of goods and services to the disabled are eligible for VAT relief. In order to be able to claim the relief you will need to issue a certificate of eligibility to the supplier of the goods or services. This certificate can be found at Appendix E, and 'No UK VAT' should be used as the tax rate on CUFS.
Included within this relief are:
- Adjustable beds, chair lifts, joists and sanitary devices
- Auditory training aids e.g. hearing loops
- Medical and surgical appliances
- Other equipment and appliances designed solely for use by disabled people
- Parts and accessories designed solely for use with the goods listed above
- Repair and maintenance of goods listed above
- Installation of goods listed above
- Providing, adapting, or extending a washroom or lavatory for use by a person with disabilities
- Constructing ramps or widening doorways to facilitate entry or movement within a building.
Hire of rooms
If you hire a room then room hire is normally exempt from VAT and this should be entered on CUFS using the tax code 'No UK VAT'. There are two exceptions to this:
- The person/company charging you for the room may have opted to charge VAT on the hire of the room and have an agreement in place with HM Revenue and Customs to do this. In this case VAT will be charged.
- If a room is hired for the purposes of catering or for sleeping accommodation VAT will be charged.
E.g. If you went to a hotel and hired a room for a meeting then it would normally be exempt. However, if you hired the room for an event with catering (for example a staff party) then it would be taxable.
Human Blood and Organs
Human blood and products for therapeutic purposes made of human blood, human (including foetal) organs or tissue for diagnostic or therapeutic purposes or medical research are exempt. Therefore no VAT is charge on the purchase and these purchases should be entered as 'No UK VAT' on CUFS.
Insurance
Insurance is exempt from VAT though it is liable to another tax called Insurance Premium Tax (IPT). IPT should be treated as part of the overall cost of the insurance and not separately identified or treated as VAT, and the tax code entered as 'No UK VAT' on CUFS.
Non-VAT Registered Suppliers
If we purchase something from a supplier in the UK who is not registered for VAT (normally because their turnover is too low), then they will not be able to charge the University VAT and hence the expenditure is entered as 'No UK VAT' on CUFS.
Stamps/franking machine charges
No VAT is charged on stamps or franking machine charges. See goods and services charged without VAT in the UK.
Travel tickets
Passenger transport e.g. rail fares, air tickets are zero-rated and no VAT is charged on the purchase. See Goods and services charged without VAT in the UK.