New VAT rules on research

New VAT rules relating to the provision of research came into effect on 1 August 2013. Eligible bodies (mainly educational institutions) that undertake research will need to ensure that they are clear as to whether or not their research falls within the scope of VAT. Whether or not the research project qualifies as research for VAT purposes depends on the intention of the parties at the beginning of the project – if the intention is to advance knowledge and understanding, the supply is classified as being research and will now be taxed at the standard rate.

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