VAT shock for staff vacancy ads

June 7, 1996

Universities and colleges are facing a bill for millions of pounds following the removal of VAT exemption on the cost of staff recruitment adverts.

City financial consultants estimate that some large institutions could be paying around an extra Pounds 80,000 a year because of a recent VAT tribunal ruling affecting all charitable institutions, including universities, higher education and further education colleges.

The tribunal chairman, in a hearing involving the Royal Society for the Encouragement of the Arts, Manufacture and Commerce, said that an advertisement must come within the scope of item 8 of Group 15, Schedule 8 of the 1994 VAT Act to qualify for zero rating.

This means that the only adverts to be exempted will be those whose primary purpose is making known the objects of a charity, the reasons for the objects of the charity or for raising money for the charity.

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