HMRC has now confirmed its view of the VAT treatment applicable to Covid-19 testing services, with further details contained in RCB 11/2021 published on 23 August 2021.
The contents are uncontroversial and follow the principles which apply to the VAT exemption for healthcare services with the emphasis being that the testing must be with an aim of providing medical care. It is pleasing to note that HMRC accepts that the exemption can also apply to tests required for international travel purposes, recognising that an element of the test is to also protect the health of other travellers.
One note of caution however is that just like the other exemptions for other healthcare services, it is linked to the status of the person or company carrying out the test being a relevant health professional (as defined), or in certain circumstances the person administering the test being supervised by a relevant health professional. Relatively straightforward where the person performing or supervising the test is a doctor or nurse, but the scope of the exemption is much narrower where the services involve pharmacies or dental practices.
If you would like further guidance on this topic, please do not hesitate to contact one of our dedicated VAT specialists: Mark Hetherington, VAT Partner, on 0191 243 6073 or at email@example.com; or Ian Coulthard, VAT Senior Manager, on 0191 243 6017 or at firstname.lastname@example.org.
It is pleasing to note that HMRC accepts that the exemption can also apply to tests required for international travel purposes.