HMRC clarifies rules for the VAT treatment of COVID-19 testing services

7 September 2021| CATEGORIES: COVID-19, VAT| TAGS:

HMRC has published Revenue and Customs Brief 11 (2021): VAT liability of Coronavirus (COVID-19) testing services, explaining the rules for the VAT treatment of COVID-19 testing services, following requests for clarification from UK businesses and business representatives.

Nature of the supply

This latest guidance from HMRC considers that the objectives of COVID-19 testing are diagnosis and the protection of human health, for example to protect the individuals being tested (and others) from infection. This also applies to tests taken for international air flights.

VAT liability

The brief clarifies that Covid-19 travel tests could be classified as VAT-exempt medical care where certain conditions are met, including where tests are administered in a GP surgery by a registered health professional, or in a pharmacy by the pharmacist. This is in-line with the normal VAT rules that apply to medical care.

However, where the requirements for exempt medical care are not met, such as the provision of self-administered tests which provide an immediate result, the tests are liable for UK VAT at the standard rate.

Please get in touch if you supply COVID tests and want to discuss how this impacts your business.