VAT partial exemption review: review of methodologies for valuing the provision of higher education within the higher education sector for partial exemption purposes
Summary
This review was jointly sponsored by the UK higher education funding councils, working with Her Majesty's Revenue and Customs (HMRC) and the British Universities Finance Directors Group. It examines the possible methods that higher education institutions could use to determine the basis on which to assign residual input tax.
Independent consultants KPMG LLP made recommendations on the methods that could be available to higher education institutions (HEIs), based on the findings from fieldwork carried out at specific institutions. However, these recommendations form an overall framework with no recommendations to use a particular method when HEIs are considering how to apportion residual input tax. HEIs should consider their individual circumstances when considering whether to propose a revised method.
HMRC has advised that it has no objections to HEIs using any of the specific methods within the framework; it will consider any method for partial exemption provided the resultant input tax recovery produces a fair and reasonable result.
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Report
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Appendices A and B: Summary of findings and sensitivity analysis
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Appendix C: Transparent Approach to Costing - An overview of TRAC
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Appendix D: Quality assurance review of the Transparent Approach to Costing in UK higher education
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