Charities — funded medical equipment

Produced by Tolley

The following Value Added Tax guidance note Produced 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
  • Eligible body
  • Exclusions
  • Care, medical or surgical
  • Animal charities
  • Buying goods or services
  • Goods
  • Definitions
  • More...

Charities - funded medical equipment

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

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:

  1. the goods and services must have been purchased

    1. by an eligible body

    2. donated to an eligible body

  2. is the supply of either:

    1. qualifying goods / services

    2. the repair and maintenance of qualifying goods

  3. the supply is not subject to any of the restrictions outlined below

  4. 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:

    1. medical

    2. scientific

    3. computer

    4. video

    5. sterilising

    6. laboratory

    7. refrigeration

  5. where an eligible body purchases the goods / services they must be paid for using charitable or donated funds

  6. 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:

  1. health bodies including:

    1. NHS trusts

    2. non-profit making hospitals (see below)

    3. Special Health Authority in England

    4. Welsh Health Authority, Special Health Authority and local health boards

    5. Scottish Health Boards

    6. Scottish Health Service Common Services Agency

    7. Northern Ireland Central Services Agency for Health and Social Services and Health and Social Services Boards

    8. Isle of Man Health Services Board

  2. a hospital and research institution that operates on a not-for-profit basis and meets the following conditions:

    1. it cannot and does not distribute any profits made

    2. it applies any surplus profit from its hospital or research services to the furtherance of its objectives

  3. charitable institutions that are eligible bodies include:

    1. a charitable day centre, providing that it does not exist

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