Sales by the University to employees and members of the University must be at a rate that covers the full cost to the University. This includes not only the direct costs of the goods purchased, but also an allowance for processing costs.
Further details on VAT issues and coding for private purchases recharges can be found on the VAT and other Taxes [1] web pages.
Sales to staff are not a taxable benefit provided that the full cost is recovered from the individual. If for any reason this is not the case the transaction is reportable on P11D as a taxable benefit.
Links
[1] https://www.finance.admin.cam.ac.uk/policy-and-procedures/financial-procedures/chapter-9-vat-and-other-taxes/common-errors-treatment-v-2