Partial Input

Because the University makes substantial exempt supplies (of education and some research), we are limited in the amount of PSR VAT (input tax) that we can recover.

If our expenditure relates SOLELY to taxable supplies (ie, is directly attributable) then we can recover all the input tax/VAT incurred on making that supply, using a 7 digit VAT Code.

If the expenditure relates SOLELY to exempt supplies then we can recover nothing.
However, as much of our expenditure relates to both taxable and exempt supplies, we are able to recover some of the VAT we incur.

The position is very similar in relation to non business research, where we can recover none of the input tax incurred.

This restriction on VAT recovery applies to all expenditure relating to non business, exempt and mixed supplies, and includes all goods and services received in the UK from the UK, the EU and overseas.

The percentage of VAT we can recover is calculated each year, and is called the Partial Exemption Method Calculation.