As many people have noticed, the 1st December VAT change has not been reflected in lower staff prices for catering, nor will it be. Student prices (which are VAT-free) will also remain the same as previously, continuing to attract a 17.5% discount on the staff price. Instead, the extra income College derives from the VAT reduction will be spent in a number of targeted areas, including an additional donation to the ICU Summer Ball.
In a statement given to Live!, catering explained how the complicated VAT arrangements had impacted their decision. Because students are not required to pay VAT on a number of items the College has an arrangement with HM Revenue & Customs, where it is not able to reclaim the full amount of VAT it pays to suppliers (in a similar way to VAT for sports causes headaches for the Union).
The College catering operation is also only charged VAT by its suppliers on a small range of items, such as carbonated drinks, chocolate, crisps etc. Due to the VAT arrangements the overall change to a Mars bar is helpfully stated by catering to have been 0.3p. In the first week since the VAT change, the extra income across catering was given as £796 from staff transactions and £151 from student transactions.
The College statement continued:
"[It] is not the College's intention to benefit financially from this change in government policy. Catering is run for the benefit of the students and staff of the college on a 'Not for profit' basis."
The additional "marginal" income will be used for the following:
- The SCR will be refurbished over Christmas and re-launch in January with a 25p discount on meals.
- Additional promotional offers will be run for students throughout the year.
- Catering will donate £2,000 to ICU Summer Ball.