Research Collaborators and Sub-contractors

When the University receives research funding, the work to produce the research is often undertaken with other institutions/organisations.  Whether the other organisation is a collaborator or a sub-contractor can have an effect on whether an additional VAT cost will be created.


If another organisation is named as a recipient of the research funding within the funding agreement, then they can be treated as a collaborator on the research for VAT purposes.

This means that any funds passed to the other organisation from the research funding are disbursements for VAT purposes and are outside the scope of VAT.

The best evidence is often the original application for funding which would, in many cases, show who all the collaborative partners are.  Nevertheless, research bodies added after a project has commenced can potentially also be treated as collaborators.

Collaborators should be set up in Oracle R12 as ‘Organisation 71 collaborators’, which treats the payments as outside the scope of VAT.  Therefore, no VAT charge is created.  This is a robust way to demonstrate that VAT should not be payable, as the Organisation 71 accounting treatment is not decided for VAT purposes but to record research statistics.

If you think there are collaborators on some of your department’s projects which should be set up under Organisation 71, but you are not sure if they have been, get in touch with your usual Research Accounts contact.


If, on the other hand, the other organisation is not a named recipient of the funding, or alternatively if the other organisation is named as a sub-contractor, then we are sub-contracting or outsourcing part of our research to that organisation – the other organisation will be providing a service to us.

If the other organisation/person is based in the UK then they will have to charge us VAT on their invoices.

If the sub-contractor is based overseas, we will normally have to account for reverse charge VAT on their invoices. Therefore this reverse charge VAT should be factored into the costs of the research at an early stage because if the research is non-business, the reverse charge VAT is not recoverable. 


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


  : 01865 (6) 16215


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