Charities - funded medical equipment

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Charities - funded medical equipment
  • Zero-rating goods and services purchased using charitable or donated funds
  • Definitions
  • Buying goods or services
  • Definitions
  • Qualifying goods and services
  • Funding and purchasing
  • Donated goods and services
  • International trade
  • Evidence

This guidance note provides an overview of the VAT treatment of charity funded medical equipment that can be used for human and veterinary purposes.

Notice 701/6 ; De Voil Indirect Tax Service V7.467 (subscription sensitive); VATA 1994, Sch 8, Group 15

This note should be read in conjunction with the Charities - funded medical equipment - list of applicable goods and services and Charities - VAT certificate table guidance notes.

Zero-rating goods and services purchased using charitable or donated funds

The following conditions must be satisfied before the supply can be zero-rated:

  • the goods and services must have been purchased
    • by an eligible body
    • donated to an eligible body
  • is the supply of either:
    • qualifying goods / services
    • the repair and maintenance of qualifying goods
  • the supply is not subject to any of the restrictions outlined below
  • if the supply is of the following equipment then it must be used by an eligible body mainly for medical or veterinary research, training, diagnosis or treatment:
    • medical
    • scientific
    • computer
    • video
    • sterilising
    • laboratory
    • refrigeration
  • where an eligible body purchases the goods / services they must be paid for using charitable or donated funds
  • the purchaser must provide a valid declaration of eligibility or sufficient evidence to demonstrate that the goods / services should be zero-rated

VATA 1994, Sch 8, Group 15

Eligible body

An eligible body includes the following:

  • health bodies including:
    • NHS trusts
    • non-profit making hospitals (see below)

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