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VAT and Duty Reliefs

Certain goods and services are zero-rated or reduced-rated when bought by charities. The University has charitable status by statute and therefore can apply for certain reliefs.

For each of these reliefs specific conditions have to be met. The University must provide their suppliers with eligibility declarations certifying that the conditions have been met for that relief.

Some equipment and consumables for medical research may qualify for zero rating (often referred to "VAT exempt purchases"). Funds to buy such equipment must come from charitable sources (which means that nearly all of the University's funding qualifies) and the extent of their use for medical research must be, in HMRC's terms, "substantial, real and continuing" which we would regard as meaning more than 50%.

A charity engaged in medical or veterinary research can buy substances directly used for testing, or for mixing with other substances in the course of that research, at the zero rate.

A 'substance' can be natural or artificial, and can be in solid or liquid form or in the form of a gas or vapour. If the substance is bought in the form of gas the zero rating will also apply to the cylinder rental.

As a registered charity, the University qualifies for zero-rating provided the supply of advertisement is made by a third party. The relief covers all types of advertisements on any subject, including staff recruitment.

On a requisition in T1, the "VAT criteria" section should be completed by entering "Yes" and selecting the appropriate relief:

  • CHARAD - Charity Advertising
  • EQUIP - Medical or Veterinary equipment for research, training and diagnosis
  • SUBST - Substances directly used for testing, or for mixing with other substances in the course of medical or veterinary research
  • COMPS - Computer software used solely for medical research

The VAT code should also be changed to Z (at the top and bottom of the requisition) for UK supplies and RWZ for supplies outside the UK.

Zero rating certificates are required by the supplier where they are UK based and are an application by us to the supplier to consider zero rating. We have no automatic right to zero rating and there are penalties for misuse of these certificates.

It is important to remember that the University has the responsibility to make truthful statements and to provide an appropriate zero rating certificate to support the claim. HMRC will not seek to recover VAT due from a supplier who has taken reasonable steps to check the validity of our declaration, but has failed to identify an inaccuracy in our certificate and, in good faith, has zero rated a supply. However HMRC will seek to apply input VAT on a purchase where the certification was not valid and this will be a cost to your own budget should your claim be invalid.

Use of the RWZ code is regularly monitored by the Tax Team and you may occasionally be asked for additional information regarding the purchase.

Requisitions claiming relief will be routed to the Tax Team for approval.

All goods imported into the UK from countries outside the UK are subject to import duty and VAT at rates applicable. Customs Duty will not be applied on goods with a value less than £135 but duty is waived if the amount of duty calculated is less than £9 (HMRC Reference: Notice 143, April 2012).

Universities, polytechnics and similar educational establishments can get relief of duty on the following goods imported from overseas:

  • Scientific instruments and apparatus used for non-profit-making scientific research or educational purposes
  • Spare parts, components and accessories specifically for scientific instruments and apparatus which have been granted relief and
  • Tools to be used for maintaining, checking, calibrating or repairing eligible instruments and apparatus

Goods imported as freight or in baggage

Enter one of the following Customs Procedure Codes (CPC) on your declaration:

  • 40 00 C13 for goods imported from outside the UK on which you claim relief from duty, and VAT if appropriate
  • 49 00 C17 for goods imported from UK special territories on which you claim relief from VAT

Goods imported by post

Ask the sender to write 'Scientific instruments - relief claimed' clearly on the package and its customs declaration (CN22 or CN23).

For assistance with claiming reliefs, please contact the Tax Team.