Tax Coding

All University departments are responsible for their own VAT coding and VAT accounting within Oracle, including reviewing this on a monthly basis.

The VAT team will make any corrections where the VAT value per line is greater than £100. Smaller errors could be a cost to your department.

When carrying out your monthly VAT reporting, please use the Monthly VAT Reconciliation and Reporting process.

WHAT TO DO IF YOU DISCOVER A VAT ERROR
MISCELLANEOUS CASH ACTIVITIES - TAX CODE GUIDANCE

WHAT TO DO IF YOU DISCOVER A VAT ERROR

Current errors

If you discover an error:

in the current month, or
within the immediately preceding month (e.g. as part of your monthly VAT checking)

As this is part of our normal monthly VAT return processes, there should not be any penalties associated with current errors.

However, you should also consider whether the error you have discovered is a one-off occurrence or whether the same error is likely to have been made in previous months. We are obliged to correct VAT errors for the previous 4 years, so if you think the error may have occurred on an ongoing basis you should review the previous 4 years worth of the relevant transactions to calculate the total previous error – you should then follow the guidance below in relation to the previous error.

Previous errors

If the error you have discovered occurred prior to the immediately preceding month you should inform the central Tax team about it. You should provide all the relevant information by using the VAT error reporting template.

It is University policy to consider VAT adjustment requests that have at least £100 or greater VAT value per line.

You should also consider whether the error you have discovered is a one-off occurrence or whether the same error is likely to have been made in previous months. We are obliged to correct VAT errors for the previous 4 years, so if you think the error may have occurred on an ongoing basis you should review the previous 4 years worth of the relevant transactions to calculate the total previous error, and provide the information to the central Tax team on the VAT error reporting form (XLS).

Penalties on previous errors

We may be liable to a penalty on a previous error if HMRC consider that the error was either deliberate or ‘careless’ (e.g. if organisational procedures were not followed). It is unlikely that University will be deliberate, but if they are the penalty can be up to 100% of the unpaid tax.

If the error is careless, the penalty can be up to 30% of the unpaid tax. This 30% penalty can be reduced by HMRC if we provide information which helps them. Most importantly, the penalty can be significantly reduced by telling HMRC about the error in the first place, but if HMRC discover the error themselves, then the penalty will always be at least 15%, and maybe more.

Penalties on errors will be charged to the cost centre where the error occurred, so please bear in mind that it can be more costly for you if HMRC discover the error themselves, rather than us notifying it to them.

Penalties are due in addition to the underpaid tax (and possibly interest – see below).

Type of error	Minimum penalty* as % of tax due	Maximum penalty* as % of tax due
Careless error – unprompted notification to HMRC	0%	30%
Careless error – HMRC discover the error, or HMRC action prompts notification of the error	15%	30%
Deliberate error (not concealed) - unprompted notification to HMRC	20%	70%
Deliberate error (not concealed) - HMRC discover the error, or HMRC action prompts notification of the error	35%	70%
Deliberate and concealed error - unprompted notification to HMRC	30%	100%
Deliberate and concealed error - HMRC discover the error, or HMRC action prompts notification of the error	50%	100%

* The actual penalty amount charged will depend on how much we are able to co-operate with HMRC’s queries etc.

Interest on errors

HMRC may sometimes charge interest on VAT errors in addition to a penalty and the underpaid tax itself. Any interest charged by HMRC will be charged to the cost centre where the error occurred.

Errors in the University’s Favour

If you discover an error in the University’s favour (e.g. you have underclaimed VAT on purchases) we can reclaim this VAT for you and pay it to your cost centre. Please use the relevant process for current errors or previous errors as set out above in order to provide the information for the claim.

MISCELLANEOUS CASH ACTIVITIES - TAX CODE GUIDANCE

Activity	R12 Tax Code	Default Nat Acc	When to Use/What's Included:	When Not to Use/What's Excluded:
Accommodation Fees	GB VAT EXEMPT	49560	Fees for student accommodation, including provided to students of other colleges/universities	Fees from non-students for accommodation (even in student residence blocks, e.g. summer lets) – use ‘Sales – Taxable’; Domestic/residential rent – use ‘Property rental – Res’; Student Canteen/Catering income – use ‘Educational Activities’; Non-student canteen/catering income – use ‘Catering/Vending/Bar’
Catering/Vending/Bar	GB VAT STANDARD	48210/25	Catering income for hot food or food eaten on the premises from non-students; bar and vending machine income from anyone	Cold, takeaway food – use ‘Sales - non taxable’; Student Canteen/Catering income – use ‘Educational Activities’
Deposits	GB OUT OF SCOPE NO RECOVERY	22400	Refundable deposits for keys, equipment, room hire, damage etc.	Non-refundable deposits for room hire – use ‘Property rental - Comm‘ – Other non-refundable deposits - use ‘Sales – Taxable’
Donations/Gifts	GB OUT OF SCOPE NO RECOVERY	47110	Donations or gifts of money where the donor receives nothing in return other than a minor token of acknowledgement (including naming a chair or a building)	Sponsorship income, displaying the donor’s logo, or income where the donor receives a benefit in return e.g. attending an event or dinner – use ‘Sales – Taxable’
EC Advances	GB OUT OF SCOPE NO RECOVERY	26800
Educational Activities	GB VAT EXEMPT	49630	Fees for educational activities such as training, workshops, symposia, lectures etc. which are non-trading activities, using Activity 00	Conference fees in Activity 00– use ‘Fees – Conference’, Course fees in Activity 00 – use ‘Fees – Course’; Degree fees in Activity 00 – use ‘Fees - Degree’; Fees for educational activities such as training, workshops, conferences, courses, workshops, symposia, lectures etc. which are ‘closed’ courses or trading activities using Activity 25 – use ‘Sales – Taxable’; Sales of accommodation and catering to non-delegates (guests ) - use ‘Sales – Taxable’; Photocopying charges – use ‘Sales – Taxable’
Fees - Academic	GB VAT EXEMPT	43900		Fees using Activity 25 - use ‘Sales – Taxable’
Fees - Certificates	GB VAT EXEMPT	43980		Fees using Activity 25 - use ‘Sales – Taxable’
Fees - College	GB VAT EXEMPT	43910		Fees using Activity 25 - use ‘Sales – Taxable’
Fees - Conference	GB VAT EXEMPT	48240/40		Fees using Activity 25 - use ‘Sales – Taxable’
Fees - Course	GB VAT EXEMPT	43920		Fees using Activity 25 - use ‘Sales – Taxable’
Fees - Degree	GB VAT EXEMPT	43970		Fees using Activity 25 - use ‘Sales – Taxable’
Fines	GB OUT OF SCOPE NO RECOVERY
Grants/Claims (non-Res)	GB OUT OF SCOPE NO RECOVERY
Miscellaneous	GB VAT STANDARD
Property rental - Res	GB VAT EXEMPT	49520	Domestic/residential property rental	Student accommodation – use ‘Accommodation Fees ‘; Short term accommodation in student residence blocks being used by non-students (e.g. summer lets) – use ‘Sales – Taxable’; Commercial/non-domestic rent – use ‘Property rental – Comm’
Property rental - Comm	GB VAT EXEMPT	49530	Commercial/non-domestic property rental	Domestic/residential property rental – use ‘Property rental - Res ‘; Student accommodation – use ‘Accommodation Fees ‘; Short term accommodation in student residence blocks being used by non-students (e.g. summer lets) – use ‘Sales – Taxable’ student residence blocks being used by non-students (e.g. summer lets) - use 'Sales - Taxable'
Property related	GB VAT STANDARD	48210/25
Refunds/reimbursements	GB OUT OF SCOPE NO RECOVERY	61110	Refunds or reimbursement of costs where the ‘customer’ did NOT receive any benefit in relation to the purpose of the refund /reimbursement	Refunds or reimbursement of costs where the ‘customer’ DID receive any benefit in relation to the purpose of the refund reimbursement e.g. reimbursement of travel expenses incurred in order to give a lecture for an organisation/company/other university etc. – use ‘Educational Activities’; reimbursement of travel expenses incurred in order to provide advice to a company – use ‘Sales – Taxable’
Royalties	GB VAT STANDARD	49800	Royalty and rights income
Sales - taxable	GB VAT STANDARD	48210/25	All income not covered by other Activities e.g. CDs, DVDs,	Income covered by other Activities
Sales - non taxable	GB VAT ZERO	48210/25	Books, maps (not wall posters), children’s clothing	Room hire – use ‘Property rental – Comm’
Services	GB VAT STANDARD	48210/25	Income for services e.g. photocopying charges, income from ‘closed’ courses, or education/training which is trading (Activity 25), delivery charges

The University of Oxford is required by to law to submit periodic VAT returns to HM Revenue & Customs (‘HMRC’), reporting the amount of VAT it owes to HMRC and the amount of VAT it is claiming from HMRC. The VAT return also provides information on the level of sales and purchases to/from the EU.

The VAT return is compiled by the University’s central Tax Team, primarily based on data entered into Oracle by departments. We therefore need to be able to rely on the integrity of the data within Oracle in order to make an accurate VAT declaration to HMRC and comply with the University’s legal obligations.

The data within Oracle that we use to compile the monthly VAT return is based on the amounts and tax codes entered into Oracle.

As the data is entered by, or at least notified by, departments, we rely on departments:

trying to ‘get it right first time’, and
because we realise that this is not always possible, checking the data entered for the previous month and correcting it where mistakes have occurred.

It is not possible for us to fully check the data within Oracle centrally because:

the volume of data for the whole University would be too much to check, and
even more importantly, it is departments rather than the Tax Team who are aware of what the items were, what the items were used for, what activity took place, what was provided to ‘customers’ etc. and are therefore in a position to check whether the data recorded is correct.

Tax Coding

Oracle codes to ensure the right VAT treatment

Current errors

Previous errors

Penalties on previous errors

Interest on errors

Errors in the University’s Favour

BACKGROUND TO THE DEPARTMENTAL VAT REPORTING PROCESS

Related Documents

Contact Us

Reference

Newsletter Links

CONTACT US

QUICK LINKS

FINANCE DIVISION

ACROSS THE UNIVERSITY