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VAT treatment of medical research equipment and supplies

As both a charity and an eligible body the University can buy medical and scientific equipment at the zero rate of VAT, if it meets certain conditions.

Summary of the VAT relief

As the University of Bath is both a charity and an eligible body it can buy, rent or hire medical and scientific equipment and supplies at the zero rate of VAT, if it meets certain conditions.

In order to qualify for zero rating, purchases must meet three criteria:

  1. Purchases of medical equipment, software, products, or substances must be eligible for zero rating.
  2. The purchases must be used for a qualifying medical or veterinary use.
  3. The University must issue a zero-rating certificate (see below "How to get a zero-rating certificate") for each purchase that includes a declaration that the purchase will be used for a qualifying purpose, and then send this to the supplier when the order is made.

HM Revenue & Customs guidance Charity funded equipment for medical and veterinary uses.

Below summarises purchases that are eligible for zero rating. Decision flow charts can be found here

The University’s VAT Procedures includes contact details for any VAT related queries.

Purchases that are eligible for zero rating


Eligible equipment

Medical equipment is equipment that has features or characteristics that identify it as having been designed for a medical (including dental) purpose or function, such as the diagnosis or treatment of patients. This covers a wide range of goods, from simple items like bandages and tongue depressors, to complex machinery such as x-ray machines and scanners.

In addition, the following equipment can be zero rated when it is purchased or hired mainly for medical or veterinary research, training, diagnosis or treatment:

  • Scientific equipment
  • Computer equipment
  • Computer software (must be solely used in medical research, diagnosis, or treatment)
  • Video equipment
  • Sterilising equipment
  • Laboratory equipment
  • Refrigeration equipment

Zero rating is also available for:

  • Parts and accessories for equipment listed above
  • Installation, repair and maintenance services for equipment that was zero rated when purchased.

Qualifying use

Medical equipment may only be zero-rated when it is purchased or hired mainly for the following (definitions can be found at the bottom of the web page):

  • Medical or veterinary research.
  • Medical or veterinary training.
  • Medical or veterinary diagnosis or treatment.

Medical, scientific, computer, video, sterilising, laboratory, or refrigeration equipment purchased for any other use is not eligible for zero rating. This includes equipment purchased or hired for:

  • general biological studies
  • environmental research
  • research into animal husbandry or food production
  • general administration
  • domestic or leisure purposes

Medical Products

Eligible Products

A ‘medicinal product’ is a substance presented as a medicine, or an ingredient for a medicine, capable of being administered to people or animals for a medicinal purpose. The zero rate also covers medicinal products purchased by a charity for the purpose of testing the efficiency of those products.

Qualifying Use

‘Medicinal purpose’ means: - treating or preventing disease - diagnosing disease, or ascertaining the existence or degree of a physiological condition - contraception - inducing anaesthesia

or otherwise preventing or interfering with the normal operation of a physiological function, whether permanently or temporarily, by terminating, reducing or postponing, or increasing or accelerating the operation of that function, or in any other way.


Eligible Substances

A ‘substance’ can be natural or artificial and can be in solid or liquid form or in the form of a gas or vapour. If the substance is purchased in the form of gas the zero-rating will also apply to the cylinder rental.

Qualifying Use

A charity engaged in medical or veterinary research can purchase substances directly used for testing, or for mixing with other substances during that research, at the zero rate.

Excluded items

Certain items are explicitly excluded from the exemption, so it is important to take care when placing an order. General use consumables are excluded such as:

  • Stationery
  • Cleaning and sterilising fluids
  • Oil
  • Clothing (other than specialist medical clothing such as surgical masks, gowns and gloves). Note that Nitrile gloves are excluded.
  • Waste disposal bags
  • Bulk materials, such as liquids, powders, sheets, pellets and granules

General use equipment used to equip a medical facility, such as a television purchased for use in a hospital ward is also excluded.

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