1. Oracle VAT Seminar Louise Dunbar Finance Division dunbarla@cardiff.ac.uk October 2010

2. Contents 1. Introduction to VAT 2. The University and VAT in Oracle 3. Purchasing in Oracle a. VAT TREATMENT field b. PRIMARY INTENDED USE field: Recoverable VAT c. European Suppliers and INTRASTAT 4. Income 5. VAT Rate change 4th January 2011

3. 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

4. 2. Cardiff University and VAT http://www.cf.ac.uk/fince/servicesstaff/corporatefinancialservices/vat_1/index.html

5. Income Teaching Income EXEMPT e.g. Tuition Fees, Short Courses, Conferences Research Income VATABLE e.g. Industry Funded Research NON-VATABLE e.g. Research Council Grants, Charity Funded Research Other Income VATABLE e.g. Services Rendered Contracts, Sale of Goods Industrial CASE Awards, Graduation NON-VATABLE e.g. Room hire, Donations, Structural funds Partial Exemption

6. Oracle Tax Engine The 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

7. 3a. Oracle and VAT – VAT Treatment field denotes treatments generating Zero Rating Certificates Used for books/public transport/printing where no certificate required

8. Iprocurement Example Example 1 Booking a Hotel Room

16. Logged in as the iprocurement Approver

17. Finally – Approver can view the VAT element

18. Example 2 – Equipment Zero Rating

19. Input the relevant details and Add to Cart

20. View Cart and Checkout

21. Checkout

23. By entering CU% in the VAT Treatment field

24. VAT treatment fields

28. 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

29. Projects Set up

30. Example 3 – VAT recoverable activity

33. Finally – view the Recoverable VAT element

34. CountryCodeCountryCodeCountryCode AustriaAUGermanyDENethlandsNL BelgiumBEGreeceGRPolandPL BulgariaBGHungaryHUPortugalPT CyprusCYIrish Republic IRRomaniaRO Czech Republic CZItalyITSlovakiaSK DenmarkDKLatviaLVSloveniaSI EstoniaEELithuaniaLTSpainES FinlandFILuxbourgLUSwedenSE FranceFRMaltaMTUnited Kingdom GB 3c Purchasing from the European Community http://www.cf.ac.uk/fince/resources/VAT%20Guidance%20-%20Purchasing%20from%20the%20EU.pdf

35. INTRASTAT SCHOOL ORDER NUMBER SUPPLIER NAME EU COUNTRY Have you supplied a Zero Rated Certificate with this order YES or NO (delete as appropriate) Nominal Ledger Code for Payment HMRC Commodity Code UK Trade Info : ICN Online Application UK 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

36. Income Teaching Income EXEMPT e.g. Tuition Fees, Short Courses, Conferences Research Income VATABLE e.g. Industry Funded Research NON-VATABLE e.g. Research Council Grants, Charity Funded Research Other Income VATABLE e.g. Services Rendered Contracts, Sale of Goods Industrial CASE Awards, Graduation NON-VATABLE e.g. Room hire, Donations, Structural funds 4. Income

37. Sales Invoice Requests The following activities are subject to VAT at Standard Rate but are often incorrectly treated on the Invoice Request: 1. Graduation Ceremonies 2. Sponsorship Income, where sponsor is not simply donating money 3. Industrial CASE studentships 4. Services supplied to non-eligible bodies 5. Sale of second hand goods The following activities should be EXEMPT from VAT 1. Short Course or Conference Income 2. Request for Donation from a business

38. Sales Invoices and the EC

39. VAT increase 4 th January 2011 20% Rate on all VAT invoices issued on or after 4 th January 2011 AND issued within 14 days of the transaction. If the transaction was performed BEFORE 4 th January 2011, VAT may be charged at 17.5%. Recommend: 1. Purchasing - Place orders and receipt goods/services prior to 4 th January 2011 2. Sales – Invoice clients prior to 4 th January for work done to avoid queries email vat@cardiff.ac.uk with specific queriesvat@cardiff.ac.uk

40. 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