VAT with education discount

JON12

I'm returning to university this September as a mature student and keeping my current job with more flexible hours. Because I'll be out of the house a lot I'll need a laptop for work (I work remotely and normally use a desktop PC) which I should be able to claim through work as an expense. As a student, I'm entitled to a student discount (and some handy freebies!) but I wonder if my use of a student discount will mean that my employers won't therefore be able to get VAT back? I don't want to make it more expensive for them by using the discount (as it's less than 20% it'd be better for them to claim the VAT if it's either/or) but if we can get both legally then that would be ideal! Any advice would be great

MDMD

The VAT should be levied based on the reduced price. You need to get a VAT invoice (not just a receipt) so they can get the VAT back).

So if (to take a simple example) you had a laptop with a full price to you of £120, including VAT, the VAT invoice will show £100 net and the £20 VAT.

If you had a 10% discount (So the price is reduced by £12) , the VAT is adjusted making the new net cost £90, and the new VAT £18.

Effectively your £12 discount is £10 off the pre VAT cost and £2 off the VAT.

As long as you get a VAT invoice and the employer is VAT registered they should be able to get it back, regardless of any discount.

agrinnall

Your employer is likely to be successful in reclaiming the VAT as long as you can do what MDMD says. However, should HMRC undertake an investigation of your employer they may not consider the purchase to be wholly and exclusively for business purposes, so would disallow the entire cost.

antrobus

As far as VAT is concerned;

You should decide whether the supply is legitimately paid for by the employer for the purpose of the business. If it clearly is then input tax should be recovered. This is in keeping with the intention of the legislation.

VIT13400 - VAT Input Tax basics: when input tax can be claimed by the business on supplies to employees
http://www.hmrc.gov.uk/manuals/vitmanual/vit13400.htm

So long as HMRC is satisifed (should they ever look at it) that the employer had a business purpose in supporting the OP's quest for a univeristy degree, and paying for his kit, then input tax can be reclaimed.

Some bloke once 'got away with' getting back the VAT on his race horses because he thought they served a 'business purpose', so I'd have though that helping one of your staff get educated would qualify.:)

agrinnall

Actually I think I may have misread/misunderstood, now I think that the laptop is to be used so that the OP can do his employer's work while he is away from home at university. If that's all it's used for (and for instance he uses his own laptop for uni work) then there should definitely not be any issue with the purchase qualifying.