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HMRC internal manual

VAT Health

Care and treatment in institutions: Introduction

There are three tests which must be satisfied for a supply to be exempt under item 4:

  1. the supply must be made in a hospital or state-regulated institution;
  2. the supply must be one of “care or medical or surgical treatment”; and
  3. where goods are supplied, they must either form an integral part of the supply of care, or be “in connection with it”, to benefit from this exemption.

This section explains how to judge whether each of these tests are satisfied and provides some additional information on the link between UK and EU law and the underlying tension between the two.