Clarification on the VAT treatment of supplies to laboratories

One of the more complex and confusing issues in purchasing lab equipment for universities and other charitably funded bodies, is what can, and cannot, be zero-rated for VAT. At the moment, the advice from HMRC as to exactly which items are eligible for zero rating is not entirely clear which has led to an inconsistent approach with the same types of goods being charged at full and zero-rate by different providers. A group of expert GAMBICA members has now drawn up detailed guidance to help the industry make consistent decisions about zero rating. The guidance has been sent to HMRC for approval but while their response is awaited, the guidance, decision-making flowchart and list of ‘grey items’ where the HMRC guidance is unclear or contradictory may be helpful for you in deciding on your current purchasing policy. This follows discussion with CTG and sector partners including BUFDG.

A detailed press release can be read here. The guidance can be found below.

CTG Vice-Chairman Richard Bray commented: “The Charity Tax Group applauds GAMBICA’s efforts to reduce the uncertainty surrounding the VAT treatment of many items of medical research equipment.  The current pandemic illustrates the importance of medical research and the Government can confirm its support of this lifesaving work by making these supplies VAT free wherever possible.”

GAMBICA is the trade association for the instrumentation, control, automation and laboratory industries in the UK.