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VAT treatment of Covid testing services

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HMRC has published Revenue and Customs Brief 11 (2021): VAT liability of Coronavirus (COVID-19) testing services which explains the rules for the VAT treatment of Covid-19 testing services.

The testing services are treated as medical care where they involve the administration of a test to the patient and the provision of the results by a medical professional. In line with the normal VAT rules that apply to such care, Covid-19 testing services will only be exempt supplies where they are:

–        carried out and supplied by a relevant health professional within the meaning of items 1, 2, 2A or 3 of VATA 1994 Sch 9 Group 7;

–        supplied by a non-registered person, but where the services are wholly performed by a relevant health professional (exemption does not apply where the health professional is a dental technician);

–        carried out by a non-registered person acting under the supervision of a relevant health professional (exemption does not apply where the health professional is a pharmacist, pharmacy technician or dental technician); or

–        supplied by a hospital or state-regulated institution, in which case exemption also covers the supply of any goods in connection with the supply.

The supply of Covid-19 testing by a body which is regulated by the Care Quality Commission (or equivalent in Northern Ireland, Scotland & Wales) for other activities (which do not include Covid-19 testing) remains standard rated.

HMRC considers that the objective purposes of Covid-19 testing are diagnosis and the protection of human health. This also applies to tests taken for international air flights. Accordingly, such testing may be exempt medical care subject to meeting the usual requirements.

Issue: 1543
Categories: News