V16.935 Supplies of government grant funded research
Information Sheet 4/08, June 2008
This note is intended to provide some additional guidance on when the provision of research — and in particular, government grant funded research – which does not constitute a supply for VAT purposes, thus falling outside the scope of VAT. It does not represent a change in policy, and is being issued in response to comments received from the research sector, which indicate there is some confusion in this area. It is therefore intended to supplement, not substitute, existing guidance.
In brief, research is considered to be original investigation undertaken in order to gain, advance or expand knowledge and understanding. It does not include services consisting of merely confirming existing knowledge, consultancy, market research and similar. (Paragraph 5.6 of Public Notice 701/30 (Part V8) her guidance.)
3 Is there a supply of research for VAT purposes?
In the UK, the scope of VAT is defined as a tax charged “on any supply of goods or services made in the UK where it is a taxable supply made by a taxable person in the course or furtherance of any business carried out by him”. For there to be a supply for VAT purposes, there must be at least two parties and a written or