On this page:
- The three tests for medical exemption
- Qualifying equipment
- List of goods eligible for Medical Exemption
- Services: hire, repair etc.
- Computer software and licences
- Consumables, substances and medicinal products
- Qualifying purpose
- Mixed use of equipment
Background
Certain equipment (and limited services) purchased or hired by the University may qualify for VAT relief, subject to these goods or services being used for a qualifying purpose. Departments can issue medical exemption certificates to suppliers and, if accepted, the purchase will be VAT free.
On UFS, the tax rate to use is ME0% for both UK and overseas purchases. Select this tax rate and use the drop down boxes to complete a medical exemption certificate. This will appear as the last page of the purchase order, and needs to be completed each time a qualifying medically exempt purchase is made. For non-catalogue purchases, the purchase order and certificate must be sent to the supplier. For Marketplace purchases, the medical exemption statement will be transmitted with the order, and the certificate details will be retained as evidence for HMRC.
| Where there is no PO, a certificate (Appendix F) must be completed manually |
Before issuing a medical exemption certificate for purchases of equipment there are three tests which must be satisfied.
| 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 falls under one of the following headings:
|
| The goods must be used for a qualifying purpose | The goods are to be used for medical or veterinary research training, diagnosis or treatment. See mixed use below. |
Qualifying equipment
Equipment means goods designed for, or used for, one of the specific qualifying categories below. Generally it will be durable in nature, although certain disposable items, such as syringes, may still be equipment
| Categories 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. See Computer software and licences.
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 and plasticware, Bunsen burners, fume cupboards, laboratory benches and specialised sinks and catch-pots. 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 designed for industrial, domestic or any other purpose. |
| Parts | Integral components without which the equipment is incomplete, and does not function. See Specialist cleaning materials. |
| Accessories |
Items that are not necessary for eligible equipment to be used, but which improve the operation of the equipment or enable the equipment to be used, or used to better effect. For example, optional extras for eligible equipment, such as a printer for use with a computer, a specially designed camera for use with a microscope, insulated gloves for use with cryogenic equipment and a rack for holding test tubes. See PPE. 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. |
The following items are not considered to be equipment:
- Clothing — except specialist clothing such as reusable lab coats, scrubs and gowns.
- Substances —such as liquids, powders, sheets, pellets, granules that are consumed in the course of training, research, diagnosis or treatment are not equipment for these purposes. However, substances directly used for testing or mixing with other substances may qualify for zero-rating under a separate relief when supplied to the University. See Consumables, substances and medicinal products.
- Laboratory animals – not eligible equipment, however HMRC have agreed that lab animals are ‘substances’ eligible for relief under a different provision. See Consumables, substances and medicinal products.
- Consumables - goods consumed when using equipment, such as stationery, fuel, ink, oil, paper, and cleaning and sterilising fluids. However, see Services.
- Specialist cleaning materials designed specifically for cleaning certain eligible equipment (and not for a generic cleaning purpose) that is vital for the operation of that equipment may qualify as a Part.
- Personal protective equipment (‘PPE’) designed for a generic purpose (and for the general purpose of protecting the user from aerosols or hazardous materials, for example) is not eligible as equipment. Only items that have been designed specifically for medical or surgical use such as masks, gowns and gloves are eligible. For more detailed guidance on what medical / surgical gloves should be eligible, consult this table (Appendix H). All other categories of PPE are not equipment and not eligible for relief under this provision. PPE may qualify as an Accessory to eligible equipment where PPE enables the equipment to be used or used to better effect.
List of goods eligible for Medical Exemption
Please see Appendix G for a list of medically exempt goods. This list is not exhaustive. With the pace of change, new types of equipment will be developed. Each item must be reviewed individually and if it is unclear as to whether the item qualifies for relief, the underlying principles set out in HMRC’s Notice 701/6 should be followed to determine if the item is eligible.
For assistance, please contact the University Tax team.
Consumables, substances and medicinal products
Consumable goods, such as stationery, fuel, ink, oil, paper, and cleaning or sterilising fluids are not eligible equipment. However, a different relief enables substances and medicinal products to be bought VAT free by the University issuing a medical exemption certificate for:
- substances used directly for synthesis or testing in the course of medical or veterinary research.
Purchases of animal substances, such as micro-organisms, whole animals, parts of organs, animal secretions, toxins, extracts and blood products can qualify for medical exemption when used for medical or veterinary research, training, diagnosis or treatment. This includes the purchase of live animals. - medicinal products for use in medical or veterinary research or treatment
Note: substances cannot be used in treatment or training, and medicinal products cannot be used in training
Services: hire, repair, maintenance and installation of qualifying equipment
The following supplies of services in connection with qualifying equipment will also be eligible for exemption:
- the hire of eligible equipment
- repair, maintenance or installation services (whether under maintenance contracts or individual one-off repairs) of eligible goods owned or possessed by the University. Relief is extended to any goods, not normally eligible in their own right, supplied in connection with the supply of a repair and maintenance service
Computer software and licences
Where used solely in medical research, diagnosis or treatment, these services will be eligible for relief. This category is more restrictive than for qualifying equipment as it is for sole use, and does not include any veterinary use or medical training use.
Qualifying purpose
| Qualifying equipment used for the following purposes will be eligible for relief | |
| 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 | Diagnosis and treatment of a physical or mental illness or injury by a medical or paramedical practitioner or a veterinary surgeon. |
The relief is not for equipment that is to be used for general biological studies, environmental research, research into animal husbandry or food production, or general administration for domestic or leisure purposes.
Mixed use of equipment
Where equipment is to be used partly for a qualifying use, and partly for any other use, relief can only apply where there is real, substantial and continuing use in medical or veterinary research, training, diagnosis or treatment. If in doubt, please contact the University Tax Team.
See also computer software.