VRDP27500 - Medical and surgical supplies: introduction of Legal Notes 5A to 5I (anti-avoidance measure)
The inclusion of legal Notes 5A to 5I is an anti-avoidance measure inserted by the VAT (Drugs, Medicines and Aids for the Handicapped) Order SI 1997/2744 with effect from 1 January 1998. Prior to this Order, both private and NHS hospitals and institutions had been involved in schemes which enabled them to recover VAT on purchases, and avoid payment of VAT on such goods.
Interpretation of Note 5A
Note 5B
Note 5C
Note 5D
Note 5E
Note 5F
Note 5G
Note 5H
Note 5I
Interpretation of Note 5A
Zero-rating does not apply under Item 1, if an individual receiving care or treatment as an in-patient, resident or out-patient of a hospital or nursing home uses the goods. Therefore, if an independent supplier makes available such goods to such individuals, the supply will not qualify for zero-rating.
Note 5B
Where an institution makes available any aids for the disabled (refer to item 2) to a disabled person while receiving care or medical or surgical treatment as an in-patient, resident or out-patient of a ‘relevant institution’, such supplies shall not qualify for zero-rating. However the supply of invalid wheelchairs and carriages to such individuals will qualify for zero-rating - see Note 5C.
Note 5C
Note 5B does not apply to supplies to charities or to supplies of invalid wheelchairs and carriages, and parts or accessories designed solely for use with them when
the supply is made by persons specified in paragraphs (a) to (g) of Note 5H.
Note 5D
Where an independent supplier provides certain aids for the disabled (that is, medical or surgical appliances, their parts and accessories and incontinence products and wound dressings) to a disabled person receiving surgical or medical treatment or care as an in-patient, resident or out-patient of a ‘relevant institution’, zero-rating does not apply.
Note 5E
The supply of goods and services under item 2 will not qualify for zero-rating if:
- it is made in agreement or arrangement to which any person mentioned in Note 5H has been a party; or
- any part or whole of the consideration is made available by a person mentioned in Note 5H.
Note 5F
Where the supply of an invalid wheelchair or carriage is provided by a relevant institution, (see paragraph (g) of Note 5H), zero-rating will not apply. Also, where the whole of the consideration is paid by persons mentioned in paragraph (a) to (f) of Note 5H, zero-rating will not apply.
Note 5G
Zero-rating does not apply to an invalid wheelchair or carriage that is mechanically propelled and intended or adapted for use on roads. Refer to VRDP22000.
Note 5H
Contains a list of organisations referred to in Notes 5C to 5F.
Note 5I
Provides the meaning of ‘relevant institution’.