Importing goods

The uBASE system is used to purchase goods and services. Access to uBASE is restricted by profile to authorised users who have been trained to use the system. The profile required to process a purchase requisition and create the purchase order is ‘Orderer’.

When we buy goods from a supplier in the UK we know that VAT may or may not be charged depending upon what it is we are buying, but that generally is for the supplier to determine.

When we buy goods from a supplier outside the UK the situation is more complex. The VAT treatment is determined first of all, by whether the supplier is in another European Union (EU) member state or is based outside the EU.

Goods from outside the EU (eg USA, Far East, Norway, Switzerland)

The guidance on this page only covers information about the VAT treatment for your goods, and the Tax Code to use for your Purchase Order. Before making your purchase, find out more about how to import goods and the cost implications for imports.

When we buy goods from suppliers outside the EU, they will NOT charge VAT. You should use Tax Code R9 for the purchase of the actual goods from the overseas supplier.

However, when the goods physically arrive in the UK, an import declaration is made by the freight agent. The declaration tells HM Revenue and Customs (HMRC) what goods are being imported and their value. From this declaration HMRC calculates the import VAT (and possibly also Import Duty) which is payable on the goods.

Most freight agents will contact the University at the point of importing the goods to the UK and will ask whether we are entitled to claim VAT relief/exemption for purchases for medical research on the import. This is to check if we are using the imported goods in medical research; as we can claim VAT exemption on most of these types of goods. If you think that your purchase qualifies for VAT exemption then please add a note in the Purchase Order header text field.

When import charges are payable the freight agent will, in most cases, pay the import VAT and Import Duty (if applicable) and then invoice the University accordingly. This is the origin of the type of invoice received regularly from Fedex, DHL and other freight agents for import charges.

When creating a purchase order for the freight agent invoice, use the Tax Code RA for the import VAT and M0 for their administration charge and any Import Duty which is payable.

If the VAT is reclaimable, for example if the goods imported are for use on a commercial research project, then contact the Tax section who will take the necessary action to reclaim the VAT for you.

Goods from inside the EU (eg France, Germany, Spain)

When we buy goods from suppliers from other EU countries they should not charge us the VAT for their country if we provide them with our VAT number (GB 648 2388 08).

However, this does not mean that the purchase escapes from VAT altogether, as we have to ‘self-charge’ UK VAT, if the same purchase would be VATable in the UK. The self-charging is done by means of the Tax Code in uBASE and ensures that it is neither cheaper nor more expensive (as a result of VAT) to buy goods from any EU member state.

You should use the following Tax Codes for purchases of goods from other EU countries:

  • R0 if the same purchase in the UK wouldn’t have VAT charged (eg books and journals)
  • R1 if the purchase is for qualifying medical research equipment (which would be zero rated in the UK by certificate)
  • R2 if VAT would be chargeable in the UK but would be fully recoverable
  • R3 if VAT would be chargeable in the UK but would be non-recoverable
  • R4 if VAT would be chargeable in the UK but would be part-recoverable

More information about recoverable VAT is available in explaining the differences between recoverable, part- and non-recoverable VAT.

 

Need help or more information?

Who to contact
If you are in any doubt about whether your purchase is subject to VAT or which VAT code to use contact the Tax section for advice and guidance before completing your documentation.