Departments can issue medical exemption certificates when they are purchasing certain types of equipment for a qualifying purpose. This means, if the certificate is accepted by the supplier, that they won't charge any VAT on the purchase.
On CUFS the tax rate to use is ME0%. If this tax rate is selected, the system will produce an exemption certificate, or you can produce your own certificate using a copy of the template at Appendix F.
When making medically exempt purchases from outside the UK, you should always select ME0% as the tax code over any of the codes relating to acquisition or reverse charge tax.
Before issuing a medical exemption certificate for purchases of equipment there are three tests which must be satisfied. These are listed in the table below.
| The three tests for medical exemption | |
| The goods must be purchased by an eligible body with charitable funds. | The University is an eligible body and any funds held by the University are charitable and therefore this test will always be met even when the funds originally came from a commercial sponsor. |
| The goods must be qualifying equipment. | Qualifying equipment which is capable of description under one of the following headings:
|
| The goods must be used for a qualifying purpose | The goods are to be used (not necessarily wholly) for medical or veterinary research training, diagnosis or treatment. |
The exemption also includes parts and accessories of qualifying equipment.
Medical exemption can also be applied to some substances and medicinal products - see Consumables below.
Equipment
Equipment means goods with some durability although certain disposable items, such as syringes that are designed to be used once only, may still be equipment. Liquids, powders, granules and other bulk materials are not equipment for these purposes and are not covered by this relief. Consumables, such as chemical reagents, fuel, ink, medicines, paper and sterilising fluids are not covered by this relief either, although medicines and chemical reagents may come within other reliefs – see below.
| What comes within each category of qualifying equipment? | |
| Medical equipment | Items designed for use in the diagnosis or treatment of patients. This covers a wide range of goods from simple items like bandages and tongue depressors to complex machinery such as x-ray machines and scanner. |
| Scientific equipment | Equipment which performs a scientific function, not equipment which works on a scientific principle. It covers precision measuring equipment, analytical equipment for example, thermometers and weighing machines. |
| Computer equipment | Computer hardware including servers, screens, keyboards, disks. Computer software and licences to use programs are services for VAT purposes and are therefore not a supply of equipment but see - 'Services supplied in connection with . . .' below.
Machinery or other equipment which is operated by a computer or which has computerised components is not computer equipment |
| Video equipment | Covers video recording and playback |
| Sterilising equipment | Includes autoclaves and other specialised equipment using steam or other high temperature processes. It does not cover microwave ovens and other cooking appliances even if these can be used to sterilise. |
| Laboratory equipment | Covers goods designed for use in a laboratory. This includes test tubes and other laboratory glassware, Bunsen burners, fume cupboards, laboratory benches and specialised sinks and catchpots. Ordinary cupboards, lockers, seats and other furniture are not laboratory equipment even if supplied for use in a laboratory. Provided that equipment comes within this category there is no requirement that it must be used in the laboratory. |
| Refrigeration equipment | Includes all cooling and freezing equipment whether of an industrial type, special design for specific purpose or the common domestic fridge. |
| Parts | Integral components without which the equipment is incomplete. |
| Accessories | Optional extras which can be used to improve the operation of the equipment or enable it to be used, or to be used to better affect, in particular circumstances. This would cover for example, a printer for use with a computer, a specially designed camera for use with a microscope or a rack for holding test tubes.
Articles not covered are those which have independent uses such as television sets, or accessories to accessories, such as filters for cameras which are themselves accessories to microscopes. |
| What are the qualifying uses? | |
| Medical or veterinary research | Original research into disease and injury to human beings or animals. |
| Medical or veterinary training | Covers the training of doctors, nurses, surgeons (including dental and veterinary surgeons) and other professionals involved in diagnosis or treatment. The overall programme of training must include the physical application by the students of theoretical knowledge. The teaching of subjects like biology and zoology where there is no practical medical involvement with patients is not regarded as training. |
| Medical or veterinary diagnosis or treatment | The diagnosis and treatment of a physical or mental abnormality by a medical or paramedical practitioner or a veterinary surgeon. |
The relief is not for medical, scientific etc. equipment that is to be used for general biology studies, environmental research or research into animal husbandry or food production methods. Other non-qualifying purposes include administrative record keeping, entertainment, general comfort and security.
Services in connection with medically exempt equipment
The following supplies of services in connection with qualifying equipment will also be eligible for exemption:
- the hire of eligible equipment
- the services of repair and maintenance, whether under maintenance contracts or individual one-off repairs, of goods eligible to be purchased under the relief and owned by an eligible body, and
- the supply of certain computer software (a licence)
Computer software and licences to use software may only be zero-rated if they are solely for use in medical research, diagnosis or treatment. This category is more restrictive than for qualifying equipment as it does not include any veterinary use or medical training use.
Consumables
- Substances used directly for synthesis or testing in the course of medical or veterinary research and
- medicinal products for use in medical or veterinary research or treatment
can be bought by issuing a medical exemption certificate, but note that substances cannot be used in treatment or training and that medicinal products cannot be used in training.
List of Medically Exempted Goods
Please see Appendix G at the end of this guide for a list of medically exempt goods. This list is not exhaustive.