VAT News

HMRC Looking at RDEC Credits in Universities


HMRC are currently contacting the universities to question the treatment of any RDEC credits received and whether they have been treated correctly as part of a business/non-business calculation.  The inference from HMRC is that if these credits have been used to fund specific research projects they should be treated as non-business income and included in any non-business calculation undertaken as part of a business/non-business and partial exemption annual adjustment .  The credits were available to universities between 1 April 2013 and 31 July 2015 and HMRC are requesting details of how they have been used along with evidence to support any non-business calculation.  Where this hasn’t been done HMRC are asking Universities to submit an error notification for any over claimed input tax. 

If you think this might affect your University  and would like to discuss it in further detail please contact Louise Gray either on 07789744816 or by email

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