VAT and the reimbursement of travel costs
Members of staff may, at times carry out work (present papers, attend meetings) for other bodies in return for reimbursement of travel costs. In some instances, this travel is arranged and paid through the University and then recharged on to the customer.
Please note that because the University is a VAT-registered body, it may not be as simple as just reclaiming the actual amount paid. The VAT treatment of the recharge follows the supply of the staff member’s time. So, if the staff member is acting in a consultancy or other standard rated capacity then VAT must be charged on top of the travel cost.
IMPORTANT: This means that if a staff member, working in a consultancy or other standard rated capacity accepts a payment for the travel cost only and then pays this into the University's bank account then they will not get enough to cover the cost of the travel. The cash received will need to be netted down and 20% given to HMRC.
To ensure that the full recharge is credited to your account, the following options should be considered:
- Raise an invoice for the reimbursement as soon as the cost is incurred (which should include VAT if applicable*) rather than accepting a cheque;
- Ensure that any payment on the day includes VAT added on top of the cost (if applicable*). Please note that the cheque should be payable to the University of St Andrews and not made out to the individual;
- Ask the customer to purchase the travel directly for you rather than organising it through the University and reclaiming the cost (that way the cost is not attached to the supply of staff and they can get the benefit of VAT on travel being zero-rated!);
* If unsure, please check with Tax & Treasury by calling Wendy MacFarlane on ext. 2385
Instances where VAT may not need to be charged
In a few instances, the supply may be exempt and VAT will not be charged on top of the travel cost. For example, a member of staff is acting as an external examiner or presenting papers at an academic conference* and being reimbursed travel costs. You would not add VAT on top of the recharge as this is an exempt supply (as it is closely related to education). Please note that the definition of closely related is very narrow so advice should be sought by calling Wendy MacFarlane at +44 (0) 1334 46 2385 if you are not sure.
Where a member of staff attends a non business meeting and it is not in a consultancy or standard rated capacity then the reimbursement of their travel costs will be outside the scope of VAT.
*An academic conference is one where
- The conference is for educational purposes; and
- A registration fee is charged; and
- It is organised by another University
In these circumstances the repayment can be made through the link below quoting the cost centre as a reference.
Repayment of Travel Expenditure
If you are in any doubt at all then please contact vatenquiries@st-andrews.ac.uk
Private Travel
Please note that travel for private purposes should never be charged to the University's account. Staff can use the Travel Service to purchase travel for non-business reasons but this should always be paid for by the individual directly and not through the University.