Governance & Compliance 48: Overseas Payments and Income – VAT

The school VAT guidance note (PDF) ‘Schools – overseas payments and income’ has been updated and can be found on the VAT page of The Source, located in the school section.

Broadly, for goods/services brought into the UK:

  • where VAT is charged, please process the invoice as school VAT code 9 (outside the scope of VAT) as the VAT charged will be irrecoverable.
  • where no VAT is charged, please send a copy of the invoice/receipt to the VAT team immediately as an adjustment may be required to the Council’s VAT Return in the same month as the transaction (this includes petty cash transactions as well as creditors).

Where your school incurs VAT (or VAT equivalent) on transactions when your school is on a trip away from the UK this will also be irrecoverable and must be processed as VAT code 9 (outside the scope of VAT).

There are a number of different ways which a school may be purchasing from overseas without realising, as set out in the VAT guidance note.

If you intend to send any goods or services to EU or non-EU countries you must notify the VAT team at the earliest opportunity, ideally before orders are received, but certainly before any contracts are agreed or payment received.

It is imperative that the VAT team is informed immediately if your school makes any sale of image or text rights, photos, e-books and other digitised documents, supplies of advertising space on a website, online magazines or supplies of software and software updates.

The VAT rules for overseas transactions can be complex – please contact Sarah Davis in the VAT team on 01392 382842 or email vat@devon.gov.uk if you have any questions.

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