色盒直播

Don't wait, tap the vat for students

九月 27, 1996

Vice chancellors seeking to repair their bank balances by obtaining more money from students (色盒直播S, September 20) could productively look in other directions for additional funding. They could direct their finance departments to devise optimal strategies for maximising the vat zero-rating aspects of equipment and reagent purchases in facilities involved with medical and veterinary training, research, diagnosis and treatment.

Most universities employ a member of staff to support VAT monitoring over an extensive research/teaching infrastructure and who usually has little detailed knowledge of the research and training under way, the equipment employed or the reagents used. The scientific staff have negligible knowledge of Customs and Excise regulations. Should the two worlds ever collide, considerable opportunities for VAT zero-rating would come to light with their associated savings.

Universities and research institutes have called in accounting firms to carry out VAT audits. This merely directs more accounting expertise at a problem which requires a wider range of skills encompassing knowledge of research and training programmes and familiarity with a wide range of scientific equipment and reagents. The reassuring tone of the resulting audit lulls many into a false sense that all is well.

For several years I had managerial responsibility for stores in a medical research institute. The purchasing policy was designed to take maximum legal advantage of the VAT regulations, yet when a check was carried out some Pounds 3.2 million of overpaid VAT was located and steps taken to recover it.

While presenting a module on research project management to a group of MRes students, I surveyed the institute's VAT status with a view to informing the students of best practice, and located several extensive VAT overpayments. This was pointed out to the finance department but no action has yet been taken.

At another university, the prevailing opinion was that equipment purchased for medical research activities attracted relief but not equipment used in medical training. Action resulted in considerable potential savings and retrospective claims.

Customs and Excise has, since July 18 1996, reduced the period over which retrospective claims can be made from six to three years. Nevertheless, universities should design strategies to minimise tax, pursue claims up to three years back, lodge pre-emptive claims back six years and appeal against the new ruling.

Even in institutes with a proactive finance office, errors occur as a result of the different meanings attributed to items by scientists and VAT officers in terms of whether the items are durable or consumable, equipment or reagent. Non-medical departments carry out medical research and training without claiming appropriate tax relief. A number of the new universities have evolved from technical/ polytechnic institutes and passed out of the control of local authorities (where VAT is reclaimable) into the real world, without their staff having made the necessary mental adjustments. Many nursing and other medically related colleges have linked up with universities to acquire degree status and come under finance departments which possess only an elementary VAT strategy.

Vice chancellors could manage on less and, as your leader suggests, employ the savings to fund scholarships for students. These funds could be tapped now rather than waiting until the next century for the fallout from the Dearing committee of enquiry.

WILLIAM J. MARTIN Sale Cheshire, M33

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