HMRC have published Revenue & Customs Brief 11 (2021): ‘VAT liability of Coronavirus (COVID-19) testing services’, which explains the VAT treatment of COVID-19 tests.

For VAT purposes, providing a service of COVID-19 testing is treated as medical care, where:

  • It involves the administration of the test to the patient.
  • The provision of the results by a medical professional.
    • This includes where such activity is supervised by a medical professional.

The supply of Medical care can only be exempt from VAT where it is:

  • Carried out and supplied by a relevant health professional.
    • A list of health professionals can be found in VAT Notice 701/57.
  • Supplied by a non-registered person, but the services are wholly performed by a relevant health professional, excluding dental technicians. 
  • Carried out by a non-registered person acting under the supervision of a relevant health professional, excluding pharmacists, pharmacy technicians and dental technicians.
  • Supplied by a hospital or state-regulated institution. 
    • UKAS accreditation is not a state regulation for these purposes.
    • For VAT groups: only the body making the supply needs to be state-regulated.

COVID-19 testing supplied by a body that is Care Quality Commission (CQC) or equivalent regulated, is standard rated, unless:

  • Another exemption condition is met.
  • The CQC regulation is in respect of COVID-19 testing.

Travel tests

COVID-19 tests taken for international flights may be exempt from VAT where the conditions above for exemption are met.

  • HMRC considers the purposes of testing to be the diagnosis and the protection of human health: this also applies to travel tests.

The facts of each case must be considered on their own merits. HMRC have provided the following examples:

Standard rated

  • The sale of self-administered tests that give an immediate result.
  • Tests supplied to hospitals, pharmacies or GP surgeries by the manufacturer.

Exempt

  • Tests administered directly by a pharmacist, within a pharmacy.
  • Tests in GP surgeries where they are administered or directly supervised by a registered healthcare professional.
  • A sale of tests that include the supply of testing and diagnosis of a sample provided by someone other than the buyer, where the testing and diagnosis is carried out or directly supervised by a registered health professional.

Useful guides on this topic

Health and welfare: VAT
Reduced rating, zero-rating and VAT exemption can apply to various services relating to medical care, health and welfare. This guide looks at supplies of medicines, supplies of goods and building works to disabled persons and charities, medical care, and welfare services.

External link 

Revenue & Customs Brief 11 (2021): VAT liability of Coronavirus (COVID-19) testing services


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