HMRC has updated Notice 701/57 entitled Health professionals and pharmaceutical products. The new version of the notice cancels and replaces the previous version. A new section 6.4 ‘Deputising Services’ has been added and section 6.5 ‘Supplies of self-employed locum doctors including GPs’ has been updated.
The notice also includes details of the temporary zero-rate of VAT on the sale of personal protective equipment (PPE) that was introduced as a result of the pandemic from 1 May 2020. The temporary rate is due to come to an end on 31 October 2020. The reduction in VAT is of particular benefit to care providers, who are often unable to reclaim the 20% VAT they incur on their purchases.
The notice is aimed mainly at registered health professionals, care providers who are not enrolled on any register of medical or health professionals and employment business that provide care staff to hospitals or similar healthcare institutions.
The notice covers:
- the VAT liability of goods and services provided by registered health, medical and paramedical professionals, including the VAT liability of drugs, medicines and other goods available on prescription, as well as contraceptives and smoking cessation products;
- the circumstances in which VAT registered health professionals may recover the VAT they have incurred on purchases and overheads;
- specific rules that apply to supplies made by dentists, overseas medical practitioners and deputising doctors;
- the circumstances in which care services provided by non-health registered suppliers are VAT exempt, and
- the VAT liability of supplies of health professional staff.
Source: Informanagement