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VAT: zero-rating charity-funded research

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Although the VAT temporary zero rate for supplies of personal protective equipment (PPE) came to an end on 31 October 2020, the Trade Association for Instrumentation, Control, Automation and Laboratory Technology (GAMBICA) has published new specialist guidance on the scope of zero-rating which continues to apply when universities and other charitably funded bodies purchase laboratory equipment.

According to the Association, confusion around the scope of zero-rating has led to inconsistent approaches with the same types of supplies being charged at different rates by different providers.

To allay this confusion, the GAMBICA guidance aims to help the industry make consistent decisions about zero rating. The guidance has been sent to HMRC for approval. GAMBICA is also recommending to HMRC that all PPE used in charitably funded medical and veterinary research be eligible for zero rating, and that eligible bodies be allowed to claim zero rate VAT on all equipment used in training, treatment, research and diagnosis.

Welcoming the new guidance, the Charity Tax Group commented: ‘The Charity Tax Group applauds GAMBICA’s efforts to reduce the uncertainty surrounding the VAT treatment of many items of medical research equipment. The current pandemic illustrates the importance of medical research and the Government can confirm its support of this lifesaving work by making these supplies VAT free wherever possible.’

Copies of the guidance are available on request from GAMBICA. The Association was previously known as the Group of Associations of Manufacturers of British Instrumentation, Control and Automation, but now simply uses the acronym.

Issue: 1509
Categories: News