1. VAT Cost Sharing Groups
(CSG)
Focussed on Education Institutions
Guy Malkerson ACMA
2. Main CSG factors to consider
Must be a supply of service
No profit or loss can be made on
supplies to members
The CSG exemption does not apply
to commercial outsourced services
or arrangements
Funds can be raised or
contingencies built to make a
capital purchase
3. Additional factors
Goods that are ancillary to a service
are also covered in the CSG
exemption
It is possible for the CSG to make a
profit by supplying services to third
parties who are not a part of the
group
CSGs must not engage in marketing
or promotion of services for profit.
4. Factors specific to Jisc
Institutional Membership for UK
education, learning and research
providers only
These members carry on activities
exempt from VAT or which are not
business activities for VAT purposes
These members activities amount to
at least 85% of total activities or
Jisc supplies are directly attributable
to relevant activities.
5. Allocation of income and costs
Must seek to find a true and fair
way to allocate the costs to the CSG
members
The allocation method(s) must be
transparent
Must be accepted by the members
There are many different ways to
allocate income and costs
7. Examples of methods of allocation
apportionment
Student FTE of each institution
Staff FTE of each institution
Subscription package
Value of services used
Type of membership (institutional
or representative)
Weighted by significant factors
8. Methodologies for calculating a
Full Economic Cost (FEC)
Direct, indirect and overhead costs
passed on in full to the CSG
Accruals included in the calculation
Space/ estates charges inclusive of
depreciation are also relevant
Infrastructure investment a part of
FEC, being key to sustainability
Future FEC costs would be inflation
and incremental uplifts
9. Sum up
A full calculation of income and
costs is required
These must be allocated fairly and
transparently across the CSG
membership
The CSG must operate within the
constraints of the guidelines
