Grants, donations and sponsorship
Grants
Grants are outside the scope of VAT as long as the funding is not conditional a service being provided in return for the funding.
Grants from funding bodies
Grants from funding bodies that are outside the scope of VAT include those from the Office for Students, Department for Education and Higher Education Innovation Fund.
Grants for research
Grant funded research is usually provided by funding councils, charities and government. It is outside the scope of VAT as long as no specific deliverables are specified in return for funding, and it produces results that are released into the public domain.
Donations
Donations are outside the scope of VAT. Any “donation” that is made on condition that the University provides something in return is not a donation, as the University is making a supply to the donor which would be liable to VAT. A mere acknowledgement of the donation, such as the naming of a chair or facility after the donor, is not liable to VAT
Sponsorship
When the University receives income from sponsorship it will normally be making a taxable supply if it is obliged to provide the sponsor with a significant benefit. This includes advertising or promotional benefits, or provision of special rights to the sponsor, such as marketing opportunities or privileged use of facilities or expertise. Displaying the sponsor’s logo on a programme or website is not considered a significant benefit in itself and so does not create a VAT charge.
VAT must be accounted for at the standard rate on the value of income received under the sponsorship agreement. The University may exclude from this value any payment made by the sponsor that can be treated as a non-taxable donation.