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HMRC internal manual

VAT Charities

Medical and scientific equipment (“relevant goods”): Determining the liability of a supply

The responsibility for determining the liability of any supply rests with the supplier. However, with this relief it is accepted that the recipient has a role as there are factors over which the supplier has little or no knowledge. There are four main criteria:

  • the supply must be of relevant goods
  • they must be paid for with charitable funds or voluntary contributions
  • the goods must be supplied to an eligible body (or for donation to an eligible body)
  • they must be put to a qualifying purpose.

The supplier

The supplier is entirely responsible for determining whether the goods are “relevant” goods. For example, if plastic aprons have been supplied as medical goods, which clearly they are not, then the supplier should be assessed for the tax. Additionally the supplier should take all reasonable steps to ensure that the goods are being supplied, or will be donated, to an eligible body and for a qualifying purpose. For example, if the supply is to a GP practice then enquiries should be made as to the claimant’s status. If the supplier has any doubts, the goods should not be supplied at the zero rate until proof of status is produced.

The customer

It is the responsibility of the customer to establish to the satisfaction of the supplier that they are:

  • an eligible body, or
  • that they are donating the goods to an eligible body.

This is normally done by means of a declaration. However, if required, the customer should be prepared to furnish further proof of eligibility. The customer is the only person who can attest to the use to which the goods are to be put.