The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of what VAT can be recovered by NHS bodies on costs incurred for the purposes of their business and non-business activities. For more information on the supplies made by NHS bodies, please see the Hospitals and health institutions guidance note.
The majority of activities carried out by NHS bodies are statutory in nature and are therefore treated as non-business activities for VAT purposes. The main non-business activity carried out by an NHS body is the provision of healthcare services. NHS bodies can also carry out business activities, such as the supply of catering services, sale of goods from vending machines and any on-site shops, etc and they will be expected to charge VAT on the any taxable activities in the normal way.
The NHS body may also make some business supplies that will be exempt from VAT. Exempt supplies include the provision of private healthcare, financial services, certain land and property transactions, certain training and education services, etc. Please see the Overview ― items that are exempt from VAT guidance note for a list of exempt supplies. It is important that the NHS body accurately differentiates between exempt and zero-rated supplies as VAT is not normally recoverable on costs incurred in connection with exempt supplies under the partial exemption rules. VAT incurred on costs can, however, be recovered in connection with zero-rated supplies made by an NHS body. Please see the Overview ― items liable to VAT at the zero-rate guidance note for a list of zero-rated supplies.
NHS bodies are not subject to the normal VAT registration requirements. They can be identified because they have a special VAT registration number that begins with 654 followed by six digits.
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