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’.
Every purchase order created must have a VAT code. This code is referred to as a Tax Code in uBASE and is used by the Tax section each quarter to produce the VAT return which is submitted to HM Revenue and Customs (HMRC). The VAT code also helps the tax team to understand where VAT costs are being incurred across the University so that we can target our efforts in minimising these costs.
The University, as a charity, is entitled to claim relief from VAT on purchases of advertising and certain related services. The VAT relief covers all types of advertisements on any subject, including staff recruitment.
The advertisement may be made via any medium which communicates with the public. This includes all the normal advertising media such as television, cinema, billboards, the sides of vehicles, newspapers and printed publications.
We are also entitled to claim relief for design services, even where these are not provided by the same supplier who is providing the advertising space. For example, if we are paying for a radio advertising campaign we can claim relief for the ‘airtime’ bought from the radio station. However, we can also claim relief for the production services of a separate company which might put together, as a CD, the content of the advert which is to be broadcast.
The VAT relief on advertising does not include:
- direct mail and telesales
- anything on a charity’s own internet website
- advertisements where there is no supply of time or space to the charity, for example, an advertisement on a charity’s own greeting cards
- exhibition stands and space
- services of distribution
- marketing items, whether or not they bear the charity’s logo, for example, pens, bags and clothing
Claiming the relief
The Tax Code M0 should be used on a purchase order for claiming VAT relief for purchases for advertising. When the Tax Code M0 is used on a purchase order NO declaration is printed to claim the VAT relief. To claim the VAT relief it is necessary to issue a separate certificate to the supplier when we place the purchase order (they need this as evidence to show to HMRC when they are audited).
You can download a template; ‘VAT exemption for advertising certificate’ from the A-Z of useful forms and codes. You will need to complete the certificate with supplier details, print a copy of your departmental headed paper and send it to your supplier. You will also need to send a copy of this certificate to suppliers for purchases where the purchases order is not physically sent to the supplier, eg on-line purchases.
Need help or more information?
Who to contact
If you need advice or guidance on which VAT code to use for purchasing goods and services from UK suppliers then contact the Tax section before making your purchase.