Essential Guide to VAT

Confused about the VAT receipting? Worry not - we are here to help!

Disclaimer: This guide is intended as a reminder page, in addition to the training guides are available on the ICU website here . This page summarises the majority of CGCU CSP financial transactions, but there will be exceptions to the general rule. The CGCU exec will not be liable for any mistakes your club makes because of this guide. Please drop me (the VPFS) an email with any questions you may have.

VAT Documentation on Expenditure

The information below is different for sports clubs and for charity events, please drop me an email or refer to ICU training guides available here for more assistance there.

ICU VAT Guidelines

Above taken from page 7 of the Money Out ICU training guide. It is a legal requirement for a company to provide the above evidence.

This documentation is required for all expenditure by your club, if the club wishes to claim back the VAT on its expenditure.

This essentially gives the club a 17% discount on all spending. The money your club will be deducted is [amount inc. VAT] ÷ 1.2. For exmaple, if you spend £100 including VAT, your club will be deducted £83.33 on eActivities.

We have also found that some companies will refuse to change invoice address. It is crucial for amounts greater than £250, make sure you use the union’s address when ordering (not college’s or your personal address).

VAT Exemptions

Some smaller companies are not VAT registered, so do not pay VAT, which means we cannot claim VAT back. This is also the case for non-UK companies, we cannot claim any VAT back there either. Use activities VAT code PN code for these.

If you fail to gain the required evidence, and cannot get it, use VAT code PN, and explain in the notes section that you are not claiming back VAT. CGCU CSP officers will reject any transaction which has insufficient evidence for a corresponding VAT code of P1 (20%).

There are also several other VAT codes on eActivities for VAT exempt items (PE) or low-rate VAT (PL – 5%). Please reflect these within your eActivities lines too.

The correct documentation is essential and is mandatory by law in claiming back VAT; these requirements are set by HMRC (UK government tax authority), not the ICU.

VAT on Sales

When you sell as the union, or gain sponsorship, you must charge VAT, even when taking cash sales. This is automatically taken away by eActivities when using the both the union shop and banking records. Make sure to account for this in your financial planning.

As a charity, the union is able to take VAT-free donations though. The usual evidence required for this is “This purely a donation and I expect nothing in return.”

Useful Links

ICU Training Guides

Gov.UK

"You must provide an individual VAT invoice if a customer asks for one"

For more information, see gov.uk/vat-retail-schemes .

Requirements of a VAT invoice: gov.uk/vat-record-keeping/vat-invoices