Compliance

University tax status, policy and strategy

The University is an exempt charity, a Legal Status which provides shelter from certain direct taxes when considering its primary purpose activities, but which does not exempt the University from paying tax altogether.

The University has a number of policies, processes and tools in place that ensure that all compliance obligations are met. The University Tax Strategy outlines how the University ensures it complies with its tax obligations; the University Statutes, Financial Regulations and Financial Processes lay out the broad structure whereby the University manages the delegation of responsibility.

Tax Compliance

The University takes every step possible to ensure it complies with all its applicable tax obligations, these include the following taxes and related legislation:

The University is subject to Corporation Tax on non-primary purpose activity, and there is guidance and training available to assist in distinguishing non-primary purpose activities from primary purpose.

A primary purpose ‘activity’ is one that furthers the charitable objects of the University. University Statute I, paragraph 3 provides:

“The principal objects of the University are the advancement of learning by teaching and research and its dissemination by every means.”

In addition to this, a charity’s primary purpose activities must also provide public benefit as defined by the Charity Commission.

Therefore, a primary purpose activity must both:

  • have a charitable purpose.
    ‘Advancement of education’ is a charitable purpose set out in the Charities Act. 
  • be for public benefit – all the following must apply:
    • there must be an identifiable benefit;
    • benefit must be to the public or a section of the public;
    • people on low incomes must be able to benefit; and
    • any private benefit must be incidental.

In September 2017, the Criminal Finances Act 2017 (CFA) came into force, creating two new criminal offences for companies and other bodies corporate (which includes the University) of failing to prevent the facilitation of tax evasion in the UK and overseas. The CFA pages outline how the University is bound by the Criminal Finances Act and what it is doing to uphold its responsibility to prevent tax evasion.

As an organisation that imports goods and services from outside the UK, the University is also potentially subject to Customs Duties. All of the University's preferred suppliers are familiar with the requirements, and the Tax Team provide training in this complex area.

Individuals who provide contracting or Personal Service Companies invoices for work or services may be considered employed by HMRC – and subject to tax and National Insurance accordingly. Under HMRC regulations the University is responsible for determining contractors' employment status for the purposes of taxation and therefore cannot take the assurance of a contractor that they are self-employed. Specific resources to manage the risk of non-compliance include the HMRC Check Employment Status for Tax (CEST) tool.

As an employer, the University is also liable for employment taxes (also known as payroll taxes), primarily Income Tax and National Insurance (NI). The University is required by law to deduct tax at source from any payments made in the nature of employment. This is handled on a day to day basis by the Payroll Team.

Other payments (such as expenses or benefits) made to employees are potentially subject to taxation. The Payroll Team liaise with Departments to complete the annual P11d process as part of the University's statutory reporting requirements.

The University operates multinationally. The Tax Team liaises with its subsidiaries, related companies and charities as well as Oxford University Press to ensure compliance with filing obligations such as Senior Accounting Officer Legislation, Country by Country Reporting and Automatic Exchange of Information.

The University is liable for employment taxes where the employee is based, so if employees are working overseas, there could be tax, social security, and pension implications in non-UK tax jurisdictions. The University has a dedicated Global Mobility Manager to manage this risk, see the International Taxes page for more information.

Transactions in land are subject to Stamp Duty Land Tax (SDLT), there are a range of reliefs available for charities where certain conditions are met. Please see our SDLT page for more information.

Value Added Tax or VAT is the area of taxation that affects most University financial transactions on a daily basis. It is complex for the University as it is subject to various different exemptions, reliefs, and other VAT regimes. Contrary to common belief, VAT is a real cost for the University; only specific elements of the VAT we suffer can be recovered from HMRC. The accounting system has a complex tax engine which calculates and processes our VAT liabilities. This feeds through to our quarterly VAT return reporting.

Guidance on a range of common VAT issues is available on the Tax Team website, including on Research VAT treatment (including the VAT Research tool) to support the assessment of research income and costs for appropriate VAT treatment, as well as collaborator VAT treatment (included in the VAT Research tool) to support the appropriate identification of collaborative relationships versus supplier relationships. Further guidance covers areas such as conferences and events and the reverse charge mechanism.

If you have any questions about tax compliance please see the linked pages above for more information and the contact details of the relevant team.

Contact Us


 : Finance Division
       University of Oxford
       23-38 Hythe Bridge Street
       Oxford OX1 2JD

  : vatenquiries@admin.ox.ac.uk

  : 01865 (6) 16215

Reference


Tax Glossary

 
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