VAT Advice for Hospitals and the Healthcare Sector

The VAT responsibilities of hospitals and other healthcare facilities can be difficult to understand. To benefit from VAT exemption under the relevant laws, you must be considered a qualifying institution - these can include hospitals, hospices, nursing homes, or other institutions that provide medical care and are regulated by the state.

Goods supplied by any such institution for the purposes of treatment or care are exempt from VAT, but items that are considered separable from this provision are not exempt. In some cases, it can be difficult to determine what will qualify. For example, the use of bedside phones or televisions will not be covered in most cases, and whether you need to pay VAT on toiletries provided to inpatients will also depend on individual circumstances.

At The VAT People, we can assist healthcare institutions by providing advice on whether  the relevant VAT exemption criteria are met, and, in the event this is not the case, help determine the amount of VAT due on goods/services provided. . Our experience means that we can provide you with advice that is bespoke to your circumstances and straightforward to implement.

We work alongside hospitals and other healthcare institutions to provide practical advice about VAT obligations. Call The VAT People on 0161 477 6600, or get in touch by filling out our online enquiry form and we will call you back.

How we can help you

The VAT People can provide specialist advice that is tailored to your specific requirements as a hospital, hospice or other healthcare facility. We work hard to stay up-to-date on the latest regulations across the sectors we advise, and as well as ensuring that you are aware of your obligations, we can highlight any potential VAT saving strategies that may benefit your organisation. .

A recent case brought attention to the possible ambiguity of the zero-rate of VAT as it is applied to construction for hospitals. An NHS trust procured construction services for a new mental health unit, and believed that this would be liable for the zero rate because the building would qualify as a number of dwellings. However, HMRC countered that the construction related to a building for which the proposed use was that of a hospital or similar institution. Such buildings are typically taxed at the usual 20% rate of VAT.

Ultimately it was found that the long-term residency of patients, in combination with the fact that the facility was designed primarily for care, rather than for treatment (i.e. to help patients manage their illnesses, rather than pursuing a cure), meant that the construction was liable for the zero rate of VAT.

This case highlights the need for VAT professionals to advise you on your responsibilities, and the ways in which a qualified expert can help you to save money by providing bespoke, practical advice about your situation. The VAT People uses its experience in this sector to the advantage of its clients, to ensure they meet all of their requirements.

Contact Us

The VAT People can provide any guidance or advice you need regarding VAT regulations and exemptions for hospitals and healthcare sector institutions. Call us on 0161 477 6600, or fill out our online enquiry form and we will contact you at a time that suits you.

To learn more about our team of VAT experts and how they can help you, visit our team page.

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