VAT-exempt cost sharing group

Every UK higher and further education organisation has the opportunity to join Jisc's VAT-exempt cost sharing group.

All organisations who are in the group will save the VAT on the following optional services:

If you are a member of the cost sharing group and are able to provide confirmation of the exact taxable/exempt use of the service, Jisc will be able to reduce the amount of VAT chargeable to the taxable business use proportion of the service only. Please refer to the 'liability and conditions' section for further details.

Your membership

The VAT-exempt cost sharing group is separate from your membership of Jisc. If you choose not to join the group you will continue to benefit from the services you receive as a member of Jisc. However, you will not be able to benefit from the savings of the group and VAT charges at the prevailing rate will be applied to relevant services as appropriate. 

Further information

Why aren't all our services in the VAT-exempt cost sharing group

There will be some services which will still attract VAT. These VAT-able services arise when the charge is totally or substantially for third party costs and where there would be a significant adverse impact on Jisc’s VAT recovery rate, and therefore our cost base, if they were invoiced within the cost sharing group. We will ensure that this approach is reviewed continually in order to provide the maximum benefit for our members.

The Jisc subscription is not part of the VAT-exempt cost sharing group due to a more favourable way of managing the VAT on the subscription charge.

Second Janet fibre connections

The cost of your organisation's primary Janet connection is included within the Jisc subscription. VAT is applicable on the subscription charge for any organisation paying a Jisc subscription. 

Regarding additional connections, Janet leases telecoms circuits from the relevant local commercial telecoms provider on a +VAT basis and recharges these non-pay costs, without a markup, to your organisation on a +VAT basis. There is thus no VAT advantage to either your organisation or Jisc from placing this in the cost sharing group.

Joining the group

Every UK higher and further education organisation has the opportunity to join. View our VAT-exempt cost sharing group register of members

Please contact for further information, including how to apply. Unfortunately, Jisc and its officers and employees cannot give you legal, financial or tax advice. There should only be one application per organisation.

Liability and conditions

In order to join the VAT-exempt cost sharing group you will need to register as an 'institutional member' of Jisc.

Liability associated with being an 'institutional member' of Jisc

Every institutional member of Jisc will have its liability limited to £1, payable only in the event of Jisc ceasing to exist following an insolvent winding up. The £1 liability stems from the fact that Jisc is a company limited by guarantee. Jisc is registered at Companies House and with the Charity Commission.

Further information can be found in our Articles of Association (pdf).

Conditions of institutional membership of Jisc

Institutional members of Jisc will need to adhere to a set of conditions of the VAT-exempt cost sharing group. These have been set for us by HM Revenue and Customs. If the circumstances of your organisation change and you are no longer able to comply with these conditions, you must let us know immediately. The conditions are as follows:

In respect of the services purchased from Jisc

  1. Prior to the end of each of Jisc's financial years (currently 1 August to 31 July) institutional members shall agree to purchase services that are in the cost sharing group (ie applicable services) from Jisc in the subsequent year and shall actually purchase one or more of the applicable services in that year

Membership of the cost sharing group will be terminated automatically if the member does not purchase any of the applicable services in that year and VAT will be due at the prevailing rate on any relevant services to which your organisation subscribes from that point.

In respect of the nature of the activities undertaken by the institutional member

  1. The supplies made by the cost sharing group to the institutional member must be ‘directly necessary’ for their exempt and/or non-business activities in order to benefit from the VAT exemption
  2. To the extent that the institutional member undertakes any taxable business activities, Jisc will be required to charge VAT on the taxable use proportion of the service. The institutional member shall provide to Jisc documentation supporting the apportionment of the taxable/exempt business use of the service in order that the VAT to be charged can be determined. This documentation could be, for example, the partial exemption workings included in the VAT return of the institutional member

If an institutional member fails to provide Jisc with the required documentation, HMRC require that Jisc charges VAT on the full value of the service provided.

Whilst the above steps may seem stringent, these are essential in order to protect the whole cost sharing group by ensuring it continues to meet HMRC’s conditions.

Changes to conditions of the VAT-exempt cost sharing group

The conditions are based on current legislation relating to VAT as interpreted by HM Revenue & Customs' latest guidelines. Any changes to the applicable legislation or guidelines which requires amendments to be made to the conditions will be communicated to all institutional members in writing detailing the amendments.

HM Revenue & Customs approved

We were very careful to get approval in advance from the VAT Policy Unit at HM Revenue & Customs and Jisc will be one of the largest VAT-exempt cost sharing groups that we are aware of.

Changes to the composition of organisations, for example, mergers

Any change to the composition of your organisation should be reported to as soon as possible to allow us to make the necessary changes to our records to ensure that you receive a seamless service.

Representation and engagement

Classes of membership

Jisc’s constitution allows for two classes of membership. One class comprises representative members, which includes Jisc’s original members and guarantors - the Association of Colleges (AoC), GuildHE and Universities UK (UUK). Each of these representative members holds 30% of the voting rights. The other class of membership comprises institutional members, which is open to all higher and further education organisations across the UK. This class holds 10% of the voting rights.

Further information can be found in our Articles of Association (pdf).

How institutional members will be represented with regard to the governance matters of Jisc

As a formal necessity, the application form asks you to nominate a representative body (either UUK, GuildHE or the AoC) as a conduit through which institutional membership matters are dealt with. We recommend that institutional members appoint the most applicable representative member of Jisc.

Your organisation will not need to join the selected representative body in order for them to act as your conduit for institutional membership matters. Please select the body which you feel is most appropriate in order to complete the application process.

The institutional membership matters being referred to are those formal company law procedures relating to your institutional membership of Jisc such as formal notice of general meetings. There is no distinct disadvantage to you (in terms of reduced voting position) by operating via a conduit and this is merely being used to save compliance and administrative costs.

Other opportunities to engage with Jisc

Jisc has established an annual stakeholder strategic update event to which your organisation will be invited.   

If you do not wish to nominate a representative member to act in this way, please contact and we will discuss alternative arrangements with you.

Leaving the group

Cancelling your membership of the VAT-exempt cost sharing group

Membership of the group can be cancelled by giving three months’ written notice at any point within a given year.

Once membership ends, you will no longer be an institutional member of Jisc or be able to benefit from the savings of the VAT-exempt cost sharing group and VAT charges at the prevailing rate will apply to any relevant services.

Jisc is within its rights to cancel an organisation's membership if any charges for applicable services are not paid in full within three months of them falling due, or if Jisc becomes aware that an organisation no longer complies with the conditions of the VAT-exempt cost sharing group.