How to Handle Income For...

Money coming into the University, be it in the form of cash, cheque or debit/credit card payments, is only classed as income when it is for:

There are a VERY limited number of circumstances when it is possible to credit a payment to the University to a cost centre and guidance is outlined in When is a payment to the University not classed as income?

For guidance on handling your income, setting up new project accounts and raising Sales Invoices contact the Finance Manager for your Academic Department or Professional Services Department.

If you are in any doubt about whether income is subject to VAT or which VAT code to use contact the tax team for advice and guidance.

The University of Sheffield On-line Store provides a secure facility for University departments to sell products or services to customers anywhere in the world. Use the On-line Store for sales of: Conferences, Short Courses, Ticketed Graduation Events, Field Trips, Products (books, course packs, merchandise), and Events.

Events

If a department holds a chargeable event then the money received is always classed as INCOME.

Events take many forms (academic workshops and meeting, staff social events, etc) and can be held on or off campus, leading to a variety of VAT scenarios.

When planning a new event it is advised that you contact the tax team for specific advice to ensure that any VAT is correctly budgeted and accountanted for and that any potential VAT exemptions are claimed.

As a general rule events which involve the delivery of education (e.g. conferences, workshops, seminars and one-off lectures) do not require the University to account for VAT on any income. Any other events (e.g. concerts, trade fairs and exhibitions) require us to account for VAT on any ticket sales or other income we receive.

Common types of chargeable academic events include:

  • Conferences
    An event is classed as a conference where the primary purpose is the exchange of information and the facilitating of networking, as distinct from the payment of experts for the imparting of knowledge (which will constitute a short course).
  • Short courses
    An event is classed as a short course if it lasts less than nine months and is non award bearing. A short course may also involve the payment of an expert to undertake/teach the course.
  • Sponsorship of events
    If an event is sponsored and the University provides goods or services (including publicity) for the sponsor, in return for a payment or a 'donation', VAT should be charged on the payment from the sponsor using VAT code Z8.

  • Charging fees for attending a University educational event
    Delegates' fees for educational events organised by the University are exempt from VAT using VAT code Z0 (to record income).

  • Student field trips
    Student field trips are generally an essential part of their course and so are within the scope of the exemption for education provided by the University. Any fees charged to students for field trips are VAT exempt using VAT code Z0. Any VAT on costs relating to the trip is non-recoverable.

Providing Services to Students

University departments provide a wide range of services to students and this is classed as INCOME. Common examples of services to students which generate INCOME include:

  • Sales of course materials to students which are essential to their study
    The sale of materials which are essential to enable students to undertake their courses of study includes:
  • sales of lab coats to science students
  • sales of drawing equipment to architects
  • field trips which are an integral part of the course

This does not cover:

  • items which are NOT essential for the course
  • items which students could just as easily buy from local retailers, such as blank CDs, stationery, or other optional expenses such as music concerts
  • books, brochures or similar items

VAT code Z0 should be used for sales of course materials to students which are essential to their studies

  • Sales to students which aren’t essential to their study
    Sales of items to students which are either NOT essential for their course or items which students could just as easily buy from local retailers, such as blank CDs, stationery, or other optional expenses such as music concerts

    VAT code Z8 should be used for sales to students which aren’t essential to their studies (ie the University must account for VAT on such income)
  • Sales of books, brochures, and similar items, whether essential to their study or not
    VAT code Z7 should be used for supplies of books, brochures, and similar items
  • Catering for students and events
    This includes all sales through coffee bars, halls of residence and refectories but not sales from vending machines or any alcohol sales. This also includes a graduation lunch or open day attended by students/graduates.

    VAT code Z0 should be used for catering charges to students and code Z8 should be used for catering charges to staff and visitors (including parents of students).  Income generated through events open to both students and non-students should show both VAT income codes.

Donations

A donation is classed as income where the University receives an unrestricted gift where the funds do not need to be invested. The funds may be to support an area of research or to part fund the purchase of a piece of equipment but there is no contractual obligation for the University to deliver a report or specified output.

The payment must be made into a Donations account (ie Donations cannot be paid into a Services Rendered account). VAT code ZZ should be used for donations.

The University may be able to claim Gift Aid on donations. Contact the Development and Alumni Relations Office for further advice on donations.

Services Rendered

For the majority of Services Rendered areas (especially those involving contracts) the Clerical Officers in the Accounting and Planning Team will deal with the sales invoicing processes.

The provision of a service by the University in the return for payment is VATable unless it is either a supply of education (such as a short course or conference) or it is one of a small number of other exemptions (healthcare services, sales of research to other charities, etc). Unless you have been advised that a particular service is exempt from VAT by the Tax section, you should assume that any service you provide is subject to VAT.

  • Consultancy
    The supply of consultancy is a VATable supply where the client is in the UK, regardless of whether the client is another charity, a government body or an individual. If the client is outside the UK VAT is not chargeable provided that, if the client is in another EU country, we obtain their VAT registration number and quote it on our sales invoice. VAT on costs associated with consultancy services which we provide, is generally fully recoverable.

    See Research and Innovation Services and Human Resources web pages for more guidance on consultancy at the University.
  • Testing
    A service provided to an external organisation in the routine testing or analysis of materials/components

    VAT code Z8 should be used for income from testing
  • General
    A service provided to an external organisation which is usually governed by an agreement or contract where the obligations, risks, required outputs, timeframe, budget and payment procedures are clearly defined.

    Services Rendered General accounts always relate to non-research and non-capital activities.

    VAT code Z8 should be used for income from Services Rendered General.

Contributions to University expenses from External Organisations

An external organisation may provide an agreed contribution (in full or in part) to the University’s expenses. This will typically be a contribution towards the travel and subsistence costs of a member of staff attending a conference, seminar or meeting.

A specific Services Rendered General account should be used if contributions from an external organisation include income for:

  • expenditure other than travel and subsistence (eg consumables, staff costs), OR
  • a piece of work or service which is being undertaken for the external organisation

VAT code ZZ should be used for income from contributions for travel or subsistence where there is no related service or piece of work

This does NOT apply if the reimbursement is received from EITHER a member of University staff OR their partner/spouse for their personal travel / subsistence costs or other expenses. If the payment is this type of reimbursement then it is handled under When is a payment to the University not classed as income?.

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Need Help or More Information?

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

Contact the Income Office for advice and guidance on paying in income, petty cash and cash advances.

For guidance on handling your income, setting up new project accounts and raising Sales Invoices contact the Finance Manager for your Academic Department or Professional Services Department or the Research Finance.