All purchases will be subject to some form of taxation. The type and rate will depend on what the product is, where the goods or works are supplied from, where the services are delivered, and the ‘rules’ that apply to the procurement. The following material is not a detailed explanation of a very complex area, rather it is provided as a guide.
It is recommended, therefore, that any specific issues or queries are referred to your institution’s Head of Procurement and/or the appropriate staff within the Finance Department.
Purchases from UK suppliers
Purchases within the UK are subject to Value Added Taxation (VAT). There are different VAT rates depending on the nature of the product and, in some instances, the use to which it will be put.
Purchases from non-UK suppliers
Purchases from non-UK suppliers are not subject to VAT, however, they are subject to HM Revenue & Customs when they enter into the UK. The applicable rate is that which would have been applied had the goods been purchased from a UK supplier.
Further, purchases from non- EU suppliers may also be subject to Import Duty of up to 8% depending on the types of goods. Again, depending on what the goods are to be used for, it may be possible to claim a relief (ie not have to pay) from this charge.