Oracle VAT Seminar

Louise DunbarFinance Division

dunbarla@cardiff.ac.ukOctober 2010

Contents1. Introduction to VAT

2. The University and VAT in Oracle

3. Purchasing in Oraclea. “VAT TREATMENT” fieldb. “PRIMARY INTENDED USE” field: Recoverable

VATc. European Suppliers and INTRASTAT

4. Income

5. VAT Rate change 4th January 2011

1. Introduction Value Added Tax (VAT)

There are three rates of VAT

The rates are: standard – currently 17.5% (20% from 4thJanuary 2011) reduced – 5% zero – 0%

There are also some goods and services that are: exempt from VAT outside the scope of VAT

Output / Input VAT

2. Cardiff University and VAT

http://www.cf.ac.uk/fince/servicesstaff/corporatefinancialservices/vat_1/index.html

Income

Teaching Income Research Income Other Income

EXEMPTe.g. Tuition Fees, Short Courses,

Conferences

VATABLEe.g. Industry

FundedResearch

NON-VATABLE e.g. Research Council Grants, Charity Funded

Research

VATABLEe.g. Services

Rendered Contracts,Sale of Goods

Industrial CASEAwards, Graduation

NON-VATABLEe.g. Room hire,

Donations,Structural funds

Partial Exemption

Oracle Tax EngineThe tax engine looks at

The Supplier location & tax set up AND

The Customer location & tax set up

before determining the tax rate to apply which in Oracle becomes the “VAT Treatment”

http://www.cf.ac.uk/fince/servicesstaff/corporatefinancialservices/vat_1/index.html

“VAT GUIDANCE – purchasing in Oracle”

3a. Oracle and VAT – “VAT Treatment” field

denotes treatments generating Zero Rating Certificates

Used for books/public transport/printing where no certificate required

Iprocurement Example

Example 1Booking a Hotel Room

Logged in as the iprocurement Approver

Finally – Approver can view the VAT element

Example 2 – Equipment Zero Rating

Input the relevant details and Add to Cart

View Cart and Checkout

Checkout

By entering CU% in the VAT Treatment field

“VAT treatment” fields

3b “The Primary Intended Use” field: when VAT is recoverable

This field should NOT be used UNLESS you are instructed to do so by Finance or RACDV for a particular School/Division Activity

Projects Set up

Example 3 – VAT recoverable activity

Finally – view the Recoverable VAT element

Country Code Country Code Country Code

Austria AU Germany DE Neth’lands NL

Belgium BE Greece GR Poland PL

Bulgaria BG Hungary HU Portugal PT

Cyprus CY Irish Republic

IR Romania RO

Czech Republic

CZ Italy IT Slovakia SK

Denmark DK Latvia LV Slovenia SI

Estonia EE Lithuania LT Spain ES

Finland FI Lux’bourg LU Sweden SE

France FR Malta MT UnitedKingdom

GB

3c Purchasing from the European Communityhttp://www.cf.ac.uk/fince/resources/VAT%20Guidance%20-%20Purchasing%20from%20the%20EU.pdf

INTRASTAT

SCHOOL

ORDER NUMBER

SUPPLIER NAME

EU COUNTRY

Have you supplied a Zero RatedCertificate with this order

YES or NO(delete as appropriate)

Nominal Ledger Code for Payment

HMRC Commodity CodeUK Trade Info : ICN Online Application

Item Description for HMRC Verification of Commodity Code

Weight of Goods (in Kgs)

Total Cost of Order (estimate if invoice not yet received)

Contact Details : Name Extension Number

Income

Teaching Income Research Income Other Income

EXEMPTe.g. Tuition Fees, Short Courses,

Conferences

VATABLEe.g. Industry

FundedResearch

NON-VATABLE e.g. Research Council Grants, Charity Funded

Research

VATABLEe.g. Services

Rendered Contracts,Sale of Goods

Industrial CASEAwards, Graduation

NON-VATABLEe.g. Room hire,

Donations,Structural funds

4. Income

Sales Invoice Requests

The following activities are subject to VAT at Standard Rate butare often incorrectly treated on the Invoice Request:1. Graduation Ceremonies2. Sponsorship Income, where sponsor is not simply donating

money3. Industrial CASE studentships4. Services supplied to non-eligible bodies5. Sale of second hand goods

The following activities should be EXEMPT from VAT1. Short Course or Conference Income2. Request for Donation from a business

Sales Invoices and the EC

VAT increase 4th January 2011

20% Rate on all VAT invoices issued on or after 4th January 2011 AND issued within 14 days of the transaction.

If the transaction was performed BEFORE 4th January 2011, VAT may be charged at 17.5%.

Recommend:

1. Purchasing - Place orders and receipt goods/services prior to 4th January 2011

2. Sales – Invoice clients prior to 4th January for work done to avoid queries

email vat@cardiff.ac.uk with specific queries

Review

• The University and VAT in Oracle

• Purchasing in Oracle– “VAT TREATMENT” field– “PRIMARY INTENDED USE” field– European Suppliers and INTRASTAT

• Income

• VAT Rate change 4th January 2011