VAT treatment of Coronavirus testing services clarified after controversies 


With the ongoing pandemic causing a high demand for COVID-19 testing, HM Revenue & Customs (HMRC) has published new guidance on the circumstances in which such services are exempt from VAT following a call for clarity from many businesses reliant on regular testing.

HMRC has said that the service of COVID-19 testing is treated as medical care in most cases, where it requires the administration of the test to the patient and the results require the assistance of a medical professional, including where the work of another person is supervised by a medical professional.

The supply of medical care is typically exempt from VAT and as such it should not be applied where testing is:

  • Carried out and supplied by a relevant health professional within the meaning of items 1, 2, 2A or 3 of Group 7 of Schedule 9 of the VAT Act 1994.
  • Supplied by a non-registered person, but the services are wholly performed by a relevant health professional (this does not apply to dental technicians)
  • Carried out by a non-registered person acting under the supervision of a relevant health professional (this does not apply to a pharmacist, pharmacy technician or dental technician)
  • Supplied by a hospital or state-regulated institution, including the supply of any goods in connection with the supply.

The condition that the body is state-regulated applies only to the company making the supplies and not to the representative member of a wider VAT group.

Businesses should also be aware that services delivered by an organisation considered to be accredited by the UK Accreditation Service are not state-regulated for these purposes.

Similarly, the supply of COVID-19 testing by a body regulated by the Care Quality Commission for other activities, but not COVID-19 testing, remains standard rated.

However, the VAT exemption can apply if the supply meets another of the tests required to qualify.

COVID-19 Travel Tests  

As the purpose of COVID-19 travel tests is diagnosis for the protection of human health, HMRC has said that tests taken for international air flights may be VAT exempt medical care, subject to the supply meeting the usual requirements listed above.

To help businesses determine the VAT status of the test they require, HMRC has published the following examples:

  • Sales of tests, where the test is self-administered and an immediate result provided — Standard rated for VAT
  • Sales of tests, where included within the supply are 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 then the sale is exempt, where this is not the ​case the sale will be standard rated
  • Tests administered in pharmacies — Only exempt, where directly administered by the pharmacist
  • Tests in GP surgeries — These are exempt from VAT, where administered or directly supervised by a registered healthcare professional
  • Tests supplied by the manufacturer to hospitals, pharmacies or GP surgeries — Standard rated for VAT.

    If you are unsure about the VAT treatment of the testing services you use, or you operate a company that supplies medical services and are uncertain of the VAT status of the services you offer, please contact us today.


 VAT treatment of Coronavirus testing services clarified after controversies

VAT treatment of Coronavirus testing services clarified after controversies