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HMRC internal manual

VAT Health

From
HM Revenue & Customs
Updated
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Transport of the sick and injured: Purchase of ambulances or similar vehicles: input tax

Complaints of disparity of treatment have been received in respect of VAT incurred on vehicles purchased by organisations operating in this field. If you receive any complaints of this nature, you should use the general principles below to determine whether VAT has been correctly charged, or can be deducted as input tax.

1. The supply of an ambulance (or other “specially designed” vehicle within the context of this exemption) is usually taxable at the standard rate. If the supplier is VAT registered VAT will be charged in the usual way, but in some circumstances certain bodies such as charitable institutions providing care or medical or surgical treatment for disabled persons are able to buy ambulances and certain other welfare vehicles at the zero rate. You will find out more about this in VAT Notice 701/6(and in V1-9 Charities).
   
2. The supply of an ambulance to the NHS will be standard rated unless it is purchased with charitable funds or voluntary contributions. The NHS body receiving the supply cannot recover the VAT they are charged, because the NHS is funded on a tax inclusive basis.
3. Input tax incurred in making exempt supplies is not normally recoverable, subject to the partial exemption rules (see Notice 706). Most private ambulance operators will not be able to recover the VAT they incur on buying their vehicles and other suppliers of exempt transport services under this item will have to ensure that they only recover VAT in relation to taxable supplies.