Zero rating of medicinal products and substances used for medical or veterinary purposes

Medicinal products

A charity engaged in the treatment or care of people or animals, or in medical or veterinary research, can purchase medicinal products at the zero rate.

A ‘medicinal product’ is a substance presented as a medicine, or an ingredient for a medicine, capable of being administered to people or animals for a medicinal purpose. The zero rate covers medicinal products purchased by a charity for the purpose of testing the efficiency of those products.

‘Medicinal purpose’ means:

• treating or preventing disease
• diagnosing disease, or ascertaining the existence or degree of a physiological condition
• contraception
• inducing anaesthesia
• otherwise preventing or interfering with the normal operation of a physiological function, whether permanently or temporarily, and whether by terminating, reducing or postponing, or increasing or accelerating the operation of that function, or in any other way

Drugs and chemicals

A charity engaged in medical or veterinary research can purchase substances directly used for testing, or for mixing with other substances in the course of that research, at the zero rate.

A ‘substance’ can be natural or artificial, and can be in solid or liquid form or in the form of a gas or vapour. If the substance is purchased in the form of gas the zero-rating will also apply to the cylinder rental.

If you are unsure as to whether or not goods and services are eligible for this relief, please contact the Tax & Treasury Team at vatenquiries@st-andrews.ac.uk for further guidance.