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

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 (vatenquiries@admin.ox.ac.uk) 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 (vatenquiries@admin.ox.ac.uk) 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

 

 


BACKGROUND TO THE DEPARTMENTAL VAT REPORTING PROCESS

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.

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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