VAT on Purchase of Goods from outside of Europe

The invoice from the supplier should not charge VAT as it is an export for them. Application of the correct tax code (I1, I2, I3, or I4) to relevant documents is essential. This tax code should be provided by the purchaser, not by accounts office personnel.

Note, if there are “add on” costs to delivering the goods e.g. courier service, then those costs should be treated as part of the cost of the goods themselves, and not as a separate service.

Regular ’Departmental Expenditure’ - Non Reclaimable vat

• I1             Vat needs to be added13.5% ( Low Rate)
• I2             Vat needs to be added 23% ( Standard Rate)

Certain ’Vatable Research contracts' - Reclaimable vat

• I3             Vat needs to be added13.5% ( Low Rate)
• I4             Vat needs to be added23% ( Standard Rate)

When keying in Purchase Orders, the amount entered is the VAT EXCLUSIVE value, and by entering the above codes, the system calculates the vat as appropriate.

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