Post on 21-Jul-2020
Annex 1 v3-01.doc
1 This is additional information to help guide members on the application and recovery of VAT using the COS
directory the content has been checked with HMRC for accuracy. The information on these pages does not
replace or modify HMRCs own guidance which is available on gov.uk
Annex 1- COS Headings
HMRC Contracted Out Services Direction Guidance
Table of Contents
About This Document ............................................................................................. 5
Introduction ............................................................................................................. 5
When can I reclaim VAT? ....................................................................................... 7
Are there any exceptions to the normal claim period for COS VAT? ...................... 7
Can I adjust a COS VAT claim I have already made? ............................................ 7
Single/Multiple supplies .......................................................................................... 8
How do I interpret the Treasury’s Direction? .......................................................... 8
Recent developments ............................................................................................. 9
How do I request a new heading in the Treasury’s Direction? ................................ 9
How to use this guidance ..................................................................................... 10
1 - Accounting, invoicing and related services ........................................................
8
2 - Administration of the following: ..........................................................................
9
3 - Administration and collection of toll charges ......................................................
9
4 - Aerial photographic surveys and aerial surveillance ..........................................
9
5 - Agricultural services of the kind normally carried out by the Farming and Rural
Conservation Agency ..............................................................................................
9
6 - Roads: Section 278 Agreements .......................................................................
9
7 - Broadcast monitoring services.........................................................................
12
8 - Cartographic services ......................................................................................
12
9 - Cash in transit services ...................................................................................
12
10 - Catering ......................................................................................................... 12
11 - Ceremonial services ...................................................................................... 12
Annex 1 v3-01.doc
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2 This is additional information to help guide members on the application and recovery of VAT using
the COS directory the content has been checked with HMRC for accuracy. The information on
these pages does not replace or modify HMRCs own guidance which is available on gov.uk
12 - Childcare services ......................................................................................... 13
13 - Collection, delivery and distribution services .................................................
13
14 - Computer services supplied to the specification of the recipient ...................
14
15 - Conference and exhibition services ...............................................................
17
16 - Debt collection ............................................................................................... 18
17 - Departmental staff records and payroll systems including administration and
payment of pensions .............................................................................................
18 18 Employment advisory services as directed by the Race Relations Act 1976 .
18
19 - Engineering and related process services .....................................................
18
20 - Environmental protection services of the kind normally carried out for the
Department of the Environment, Food and Rural Affairs ......................................
19
21 - Estate management services ........................................................................ 19
22 - Export intelligence services ........................................................................... 19
23 - Filming, audio-visual and production services ...............................................
19
24 - Health promotion activities............................................................................. 19
25 - Hire of reprographic equipment including repair and maintenance................ 20
26 - Hire of vehicles, including repair and maintenance ....................................... 20
27 - Insolvency services ....................................................................................... 21
28 - Interpretation and translation services ...........................................................
21
29 - Issue of documents to, and control of, bingo halls and off-course bookmakers
.............................................................................................................................. 21
30 - Issue of documents under Wireless and Telegraphy Act ...............................
21
31 – Laboratory Services ......................................................................................
21
32 - Laundry services ........................................................................................... 22
33 - Library services ............................................................................................. 22
34 - Maintenance and care of livestock and fauna in connection with the Royal
Parks .................................................................................................................... 22
Annex 1 v3-01.doc
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3 This is additional information to help guide members on the application and recovery of VAT using
the COS directory the content has been checked with HMRC for accuracy. The information on
these pages does not replace or modify HMRCs own guidance which is available on gov.uk
35 - Maintenance, non-structural repair and cleaning of buildings ........................
23
36 - Maintenance and repair of civil engineering works ........................................
26
37 - Maintenance, repair and cleaning of equipment, plant, vehicles and vessels
26
38 - Maintenance and repair of statues, monuments and works of art .................
27
39 - Medical and social surveys ............................................................................
27
40 - Messenger, portering and reception services ................................................
27
41 - Nursing services ............................................................................................ 27
42 - Office removals ..............................................................................................
28
43 - Operation and maintenance of static test facilities, engineering and support
services and test range industrial support and security/safety services including
those acquired for the purposes of research and development
............................ 28 44 - Operation and maintenance of stores depots
................................................ 29
45 - Operation of hospitals, health care establishments and health care facilities
and the provision of related services .................................................................... 29
46 Operation of prisons, detention centres and remand centres, including
medical services ................................................................................................... 30
47 - Passenger transport services ........................................................................
31
48 - Pest control services ..................................................................................... 31
49 - Photographic, reprographic, graphic and design services .............................
31
50 - Preparation and despatch of forms ................................................................
32
51 - Press cutting services ....................................................................................
32
52 - Professional advice or opinion on departmental efficiency or policy issues,
legal advice or opinion and internal audit ..............................................................
32 53 - Provision under a PFI agreement of accommodation...
................................. 33
Annex 1 v3-01.doc
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4 This is additional information to help guide members on the application and recovery of VAT using
the COS directory the content has been checked with HMRC for accuracy. The information on
these pages does not replace or modify HMRCs own guidance which is available on gov.uk
54 - Publicity services ........................................................................................... 34
55 - Purchasing and procurement services .......................................................... 34
56 - Radio services ............................................................................................... 35
57 - Recruitment and relocation of staff and other related services ......................
35
58 - Research, testing, inspection, certification and approval work for the Health
and Safety Executive ............................................................................................ 36
59 - Scientific work of the kind normally carried out for the Department of the
Environment, Food and Rural Affairs and the Food Standards Agency................ 36
60 - Security Services ...........................................................................................
36
61 - Services of printing, copying, reproducing or mailing of any documents or
publications, including typesetting services .......................................................... 37
62 - Share Registry Survey ...................................................................................
37
63 - Storage, distribution and goods disposal services .........................................
38
64 - Surveying, certification and registration in connection with ships and relevant
record-keeping and verification, issue of certification, cards, discharge books
and
campaign medals to seamen ................................................................................
38 65 - Training, tuition or education .........................................................................
38
66 - Transport research of the kind normally carried out for the Department for
Transport .............................................................................................................. 39
67 - Travel services, excluding hotel accommodation and fares ..........................
39
68 - Travel and transport surveys, including traffic census counts .......................
39
69 - Typing secretarial, telephonist and clerical services including agency staff ..
39
70 - Waste disposal services ................................................................................
40
71 - Welfare services ............................................................................................
40 72 Career guidance, mentoring, counselling and other related services to help
people in to work or to retain work as part of the DWP/Jobcentre Plus Employment
Programme, provided under sections 2 and 9 of the Employment and Training Act
Annex 1 v3-01.doc
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5 This is additional information to help guide members on the application and recovery of VAT using
the COS directory the content has been checked with HMRC for accuracy. The information on
these pages does not replace or modify HMRCs own guidance which is available on gov.uk
1973 ......................................................................................................................
41
73 - Services relating to Action Teams for Jobs and Employment Zones .............
41
74 - Original research undertaken in order to gain knowledge and understanding41
75 - Inspection of woodland sites for approval of felling licence applications and of
timber imports/imports using timber packing to prevent entry of foreign tree
pests
and diseases ........................................................................................................ 42
76 - Probation Services delivered under the Criminal Justice and Court Services
Act 2000 ............................................................................................................... 42
Annex A- Examples of items that are eligible for recovery under COS Headings 35
and 37 ...................................................................................................................
43
Annex B – Version History ....................................................................................
52
About This Document
The Tax Centre of Excellence first created this document in February 2016 to incorporate the COS Heading guidance that HMRC had published on their website VATGPB9700 supplemented by HMRC guidance awaiting publication on the website. There is a version history in Annex B that details which guidance is in this document version. You can jump to any Heading by left clicking (or Ctrl + left clicking) on the relevant line in the table of contents above.
Introduction
Government departments and health authorities have been encouraged to contract
out services to the private sector which would have traditionally been performed
inhouse. It is recognised that many of these services would be subject to VAT and
where they were acquired for ’non-business’ purposes, the non-reclaimable VAT
could act as a disincentive to contracting-out.
It was therefore decided to compensate government departments and health
authorities by a direct refund mechanism, which is provided for in section 41(3) of
the VAT Act 1994. Under this provision, the Treasury issues a Direction, commonly
known as the ‘Contracting Out Direction’ which lists both the government
departments and health authorities that are eligible to claim refunds of VAT, and the
services on which VAT can be refunded.
Annex 1 v3-01.doc
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6 This is additional information to help guide members on the application and recovery of VAT using
the COS directory the content has been checked with HMRC for accuracy. The information on
these pages does not replace or modify HMRCs own guidance which is available on gov.uk
Originally there were separate lists of eligible services for each department/NHS
body, but in the 1990s this was consolidated into a single list for all
departments/NHS bodies. You are therefore not prevented from reclaiming VAT on
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the purchase of one of these services merely because you had never undertaken the
activity in-house. Additionally, VAT can be recovered on services supplied by
another department under a shared services arrangements if the service is listed in
the Contracting Out Direction.
A full list of the services on which VAT can be reclaimed under the Contracting Out
Direction can be found in VATGPB9700.
When can I reclaim VAT?
Because refunds of VAT under this measure are met from public expenditure rather
than VAT revenues, COS VAT should normally be claimed within the financial year
in which the supply in question has been received - subject to a 3 month adjustment
period - the adjustment can be made no later than the June VAT return following the
financial year end. By “the supply in question has been received”, we mean the tax
point. While the tax point is normally the invoice date, this is not always the case.
Continuous supplies may have a payment tax point.
In circumstances where you have received a supply on which no VAT has been
charged by the supplier and they subsequently issue you with a VAT only invoice,
you can recover the COS VAT in the period in which you received the VAT invoice.
Are there any exceptions to the normal claim period
for COS VAT?
In the following circumstances, you can make a claim outside the financial year in
which the supply was received:
1. Where HMRC has instructed a government department or NHS body that it
cannot claim COS VAT on a particular supply and this turns out to be
incorrect – in these circumstances, the four-year cap applies.
2. Where a government department or NHS body has asked whether a supply it
has received is covered by a particular COS heading, and by the time HMRC
confirms that COS VAT is recoverable the time limits for claiming have
passed – in these circumstances the four-year cap applies.
3. Where there is uncertainty within the NHS (as a whole) or government
departments (as a whole) whether, in relation to a particular service, COS
VAT can be recovered and this is not resolved by HMRC until after the time
limits for claiming have expired – in these circumstances the four year cap
applies.
Can I adjust a COS VAT claim I have already made?
The requirement to claim COS VAT within the financial year in which the supply is
received is restricted to the actual claim itself. If a claim is made at the correct time,
any adjustment to that claim must be made within the normal time limits for adjusting
input tax (please see Notice 700/45).
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For example:
• There may have been an error in the amount claimed (but an amount has to
have been claimed).
• The price paid for the service in question may have subsequently increased or
decreased.
• The claim itself may have been subject to a further calculation, such as a
‘business : non-business’ calculation, which itself is adjusted at a later date
because of a higher or lower non-business ratio.
Single/Multiple supplies
When considering whether a supply qualifies for recovery under one of the COS
Headings, Government departments and NHS bodies should initially refer to
guidance in the VAT Supply and Consideration manual to determine whether the
supply they are receiving is a single or multiple supply. When this has been
determined you should then consider whether the supply falls within one of the COS
Headings and is eligible for recovery.
If the supply is a single supply then the predominant nature of the supply will
determine whether it is eligible for recovery under COS.
Where you receive a multiple supply, recovery on each separate supply can be
claimed under the appropriate COS Heading.
How do I interpret the Treasury’s Direction?
We have provided some advice and examples, but they cannot be exhaustive. The
purpose of the Direction should always be considered - namely to ensure that what
would otherwise be irrecoverable VAT does not dissuade you from contracting out a
service to the private or voluntary sector. If the service you are purchasing was
never performed within the government department or the health authority, it is most
unlikely to fall within the ambit of the Direction.
Section 41(3) of the VAT Act 1994 refunds VAT ‘if and to the extent that the
Treasury so direct’. There may be occasions where the Direction is limited to a set of
circumstances prevailing at a particular time. Where this has happened, we explain
the position under the relevant heading. Some Headings are seldom used, or are
bespoke to a particular department, and we do not provide explanations for these.
Additionally, we ask you to continue to use the individual pieces of guidance to
government departments and NHS bodies on heading 52 for a short while longer
until the outcome of HM Treasury’s review of its Direction is known.
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Recent developments
HM Treasury has agreed that COS refunds may be claimed for the following
activities. Until a revised Direction is published, if you are uncertain which Heading to
use, please use Heading 2.:
1. Call centre and contact centre services
2. Services provided through International Trade Advisers for UK Trade and
Investment
3. Services provided under Framework for Procuring External Support for
Commissioners (FESC) other than:
• Supplies of computer services and professional services that are excluded
from the scope of Headings 14 and 52 above, unless the Treasury directs
otherwise, and
• Elsewhere, the supply of staff.
How do I request a new heading in the Treasury’s
Direction?
HM Treasury will consider requests for a new heading in the Direction, but please be
aware that they will require a detailed business case from you. Please would you
provide this to your Customer Relationship Manager (CRM) or if you do not have a
dedicated CRM please send your application to the Public Bodies Enquiries team
whose details can be accessed on the gov.uk website
https://www.gov.uk/government/organisations/hm-revenue-
customs/contact/publicbodies-enquiries
What the Treasury will require Why they need this information
To ensure that if your application is 1)
A full description of the service or successful, the new heading accurately
activity in question. reflects the contracted-out service you
will be receiving.
2 a) If it is an existing service or activity,
how is it presently provided (for example,
in-house, already outsourced,
through an arms-length body)?
2 b) What options are being, or have been, considered? For example, in-house
provision, part in-house provision, phased outsourcing, full outsourcing,
2 c) Why would outsourcing offer value for money? What are the financial, efficiency
etc. benefits?
When Treasury are considering
requests for a
2 d) Why would
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new headings they look at
VAT be a whether VAT will be a
barrier to barrier to outsourcing and
outsourcing? why outsourcing offers best
value for money.
3) An estimate of the VAT
you will recover each year Required for the purposes of the
National accounts. for
the next five years if
your application is successful.
To provide a timescale. Please be
aware that you will need to wait for a new Treasury direction to be
published 4) The date from which in the Government Gazettes,
and the
you wish the new Heading process for renewing a Direction can be
to take effect. a lengthy one. HM Treasury receives a
substantial number of requests for new
headings, which require Ministerial
approval.
How to use this guidance
To find out what is eligible for recovery under a specific COS Heading, go to
VATGPB9700. This will provide a list of the Headings; you can then select the
appropriate VATGPB link which will take you to the guidance for that Heading.
As with all lists, this guidance could soon become out of date because of the pace of
change. We ask you to share these changes with us, and other departments and
NHS bodies, so that this guidance can be kept updated.
1 - Accounting, invoicing and related services
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This Heading concerns the outsourcing of all, or part, of an accounts department although it also covers the procurement of the type of services which would have been undertaken by an accounts department. The exclusions are functions which either had to be procured from external accountants or have since evolved as services supplied by external accountants. It would not include VAT incurred on external audit fees as, by their very nature, they would never have been performed in-house so could not be contracted out.
Includes
• Accountancy services which include general record keeping, invoicing and preparation of tax returns and other related supplies
• Preparation of financial accounts and/or statements and accountancy advice
Excludes
• External Audit fees
• Tax planning advice - for further information refer to VATGPB9450
Additional information
Internal audit reports - these deal with efficiency and any VAT incurred can be
recovered under Heading 52. Recovery is allowed as government departments
have never been allowed to do their own auditing it has to be done by another
body - now the National Audit Office.
2 - Administration of the following: • Career development loans
• Certificates of Experience
• Government support payments to the Railway Industry Pension Funds
• Grants and awards
• Services supplied under the Companies Acts and the Patent and Trademarks Acts
• Teachers’ Superannuation Scheme
• Vehicle Excise Duty refunds
• Winter fuel payment scheme
• Inherited State Earnings Related Pension Scheme
• Student Loan Scheme
• Fast Track Teaching Programme
This Heading can only be used to recover costs which relate to the named
programmes. New programmes can only be added to the list by agreement with
HM Treasury.
3 - Administration and collection of toll charges
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This Heading covers the use of a private sector supplier to manage a public sector
tolled road or bridge.
4 - Aerial photographic surveys and aerial
surveillance This Heading covers aerial photographic surveys and aerial surveillance which
includes satellite imagery or photographs.
5 - Agricultural services of the kind normally carried out by the Farming and Rural Conservation Agency The wording of this Heading was amended in 2008 when the Farming and Rural Conservation Agency was abolished under a machinery of Government change.
This Heading covers agricultural services of the kind normally carried out by the Farming and Rural Conservation Agency.
The Heading can be used by the departments of the devolved administrations
which have assumed responsibility for such activities from the Department for
Environment, Food and Rural Affairs (DEFRA).
6 - Roads: Section 278 Agreements
Alteration, repair and maintenance of road
schemes, except (a) any works carried out
pursuant to an agreement made under section 278
of the Highways Act 1980, or (b) works involving
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construction on land not already used for road schemes
The key point to this Heading is that it only applies to existing road schemes, so there would be no recovery allowed on the construction of a new road. Where a new stretch of road is added to an existing road scheme so it reaches a new destination, VAT can be recovered on changes to the existing road, for example to road markings, adjustments to the existing pavements and curbs.
Section 278 Agreements
Section 278 of the Highways Act 1980 allows a Highways Authority (HA) to seek contributions from developers towards the cost of works considered to be for the ‘common good’. For example, these works could include the construction of a new slip road or roundabout.
Any work carried out by a HA under a section 278 agreement is a non-business
activity for VAT purposes. This is because the HA has a statutory responsibility
under the Highways Act 1980, to maintain the road on which the work is carried out. As such, the construction works form part of the HA’s statutory responsibilities
for maintaining the road.
As the HA is not able to claim a refund of the VAT under section 41(3) of the VAT Act 1994, it is a condition of the section 278 agreement that the contributions they receive include irrecoverable VAT.
The HA cannot issue a VAT invoice to the bodies making contributions because it is seeking a reimbursement of costs and not making a supply.
The contributor will be unable to recover any VAT element included in the contribution they pay to the HA. This is because the VAT amount does not relate to a supply, which has been made to you. The contractor carrying out the works will always be making a supply to the HA.
Hybrid Road Schemes
‘Hybrid Road Schemes’ are works comprised of new construction together with improvements to the existing road schemes.
As the hybrid schemes involve two types of work, new construction and alteration, the costs must be separately identified for VAT purposes. This is because some of the VAT incurred on new construction undertaken in the hybrid scheme cannot be recovered.
It can sometimes prove very difficult to separate the actual expenditure on new
construction from that on alteration etc. HMRC allows an apportionment of costs to
be made based on the terms of the additional contract.
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In cases where it is not possible to directly attribute VAT elements, apportionment may be allowed. Hybrid road schemes are an example of a situation where permission to apportion the VAT has been granted.
Smart Motorways
The alteration of a stretch of motorway to become a smart motorway, and then the alteration, repair and maintenance of the smart motorway, are recoverable under Heading 6. This includes the construction of emergency exit-ways when the hard shoulder is used as a traffic lane and also the installation, repair and maintenance of gantries and signs on smart motorways, this includes the installation of the IT infrastructure.
Tunnels
The construction of new tunnels is not eligible for recovery under Heading 6. However, where a tunnel is built under an existing road scheme and this requires structural alterations or repairs to the existing road scheme, these costs will be eligible for recovery under this Heading. Repairs to existing tunnels which are under a road scheme are recoverable under this Heading.
Bridges
Construction of new road bridges is not recoverable under this Heading. Repairs to existing bridges are recoverable under Heading 36.
Peripherals
Heading 6 also covers the peripherals which are part of the road system like the paths, lighting, roundabouts, pedestrian crossings, refuges and noise barriers. New paths added to existing road schemes are also recoverable under this Heading.
Includes
• Where a health authority alters the layout of existing roads surrounding a hospital for example, in order to facilitate easier and/or safer access to the accident and emergency department. It would also extend to the repair and maintenance of such a road scheme
Excludes
• Winter road clearing and gritting services
• Erecting and maintaining of traffic signs that do not fall within the designated
area of the smart motorway
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7 - Broadcast monitoring services This Heading covers broadcast monitoring services.
Includes
• Recording news and TV programmes which are relevant to the work of a government department/health authority
• Recording radio programmes
• Providing a digest of a government department’s/health authority’s coverage in the broadcast media
• Social media monitoring, for example Facebook postings, Twitter feeds, etc
8 - Cartographic services
This Heading covers cartographic services.
Includes
• Mapping services
• Topographical surveys
• Preparation of bespoke maps
9 - Cash in transit services This Heading allows recovery on the secure transport of cash.
10 - Catering This Heading covers either the use of a private sector operator to run a government department’s or health authority’s catering function, or the use of a catering contractor to run individual events.
Includes
• Food prepared and facilities supplied by a contract catering service
• Hire of agency staff relating to that catering service
• Catering services for occasional functions
• Services associated with catering for occasional functions which form part of the supply of catering e.g. staff to serve food and drink, serving alcoholic beverages, hire of additional equipment (mobile kitchens, etc) to supplement the on-site facilities
• Vending machines when supplied as part of a catering contract
• Catering services for official functions e.g. receptions, dinners and banquets
Supplies of catering for NHS patient care
11 - Ceremonial services This Heading refers to services supplied by a private firm for the provision of a
ceremonial service.
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Ceremonial service takes its every day meaning and would include for example, opening of a new public building or hospital wing.
Includes
• Erecting seating and stands for dignitaries and the general public
• Putting up flags and bunting
• Hire of portable toilet facilities
• Putting up and dismantling crowd control barriers
• Hire of PA systems
• Laying the ‘red carpet’
Excludes
Recovery on goods, for example the purchase of:
• Flags
• Flowers
• Red carpet
• Food or drink for hospitality purposes
• Fireworks that are to be used in a display
12 - Childcare services This Heading covers childcare services.
Includes Recovery of VAT incurred on the provision of crèche facilities or
holiday play schemes operated by government departments or health
authorities for the benefit of their own employees. This includes VAT charged by
a private body with which government departments or health authorities
contract with to provide these services
Excludes
• Crèche facilities provided by a nursery/play group registered under the
Children’s Act 1989 - as these supplies are exempt from VAT
• Management of child care vouchers
Additional Information
The provision of crèche facilities is normally exempt from VAT, therefore before
making a claim under this Heading you should check the invoice to see whether or
not VAT has been charged.
13 - Collection, delivery and distribution services This Heading covers collection, delivery and distribution services in relation to
postal and courier services.
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Includes Services provided by couriers, Rail Freight, Federal Express, UPS etc.
The VAT incurred would be refundable under the Contracted-Out provisions,
regardless of the nature of the item or items being collected, delivered, stored or
distributed
• Royal Mail services where they are subject to VAT
• Courier services used for the delivery of specimens, materials, papers, etc
Excludes
• The VAT on delivery charges incurred when you purchase goods cannot be
reclaimed under the Contracted Out Services as this supply is part of a single
supply of delivered goods
14 - Computer services supplied to the
specification of the recipient
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This heading applies to services supplied to a government department or NHS
body in its procurement of an IT system to its own specifications or to specifications dictated by the government or NHS.
The origins of this heading lie in the outsourcing of entire IT systems by central government to the private sector. For this reason, the heading does not cover in isolation the procurement of off-the-shelf software or web design.
Because of the fast pace of technology, this heading is not intended to be restricted to past practices, but instead to include modern methods of supplying an entire IT system. This may not now involve using a single outsourced provider, or outsourcing all aspects of the IT system. What is important is that the department or NHS trust requires an IT system designed to its specifications (or to specifications dictated by the government or the NHS) and this is mainly provided through outsourcing. Whether ownership of the hardware is or is not in the public sector, whether there is one supplier or several suppliers, whether the servers are or are not remote, does not affect this basic position.
When we say “to the specification of the recipient” we mean that the
system/software should not be simply designed and built in order to meet certain perceived needs. The specifications must have either been specifically dictated to the supplier, or be of such specific requirements that it would have no application outside of the Government or NHS. For instance, if a system can be used by private healthcare providers, it would not meet the rule and recovery would not be possible. For that reason, many of the patient records systems that are being supplied are unlikely to be recoverable.
Provided that the supply received is an IT system designed to the users
specifications, this heading applies even though some components of the package
would – if supplied in isolation – be excluded from the heading. Thus, for example,
where a department or NHS trust requires such an IT system and outsources its
provision to several contractors, possibly retaining the project management in-
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house, in this situation the contracts and in-house project management are components of the procurement of the IT system. The only exception is telephony, which is always excluded.
The following examples of what is included and what is excluded from heading 14
should be read in conjunction with the definitions, interpretative notes and additional information at the end of this guidance.
Includes
• The provision by one or more suppliers of an IT system either using the recipients’ own hardware or hardware provided by a supplier of qualifying services that form a part of the infrastructure. At one time the requirement was for the system to be fully managed by the outsourced provider, but now it is accepted that the management function can be retained in-house (or, in the case of existing contracts, returned in-house)
• Software support which forms part of an IT system package
• The development, implementation and support of bespoke software
• Hosting Computing Services, Archiving Communication Services, Data Communications Services, Desktop Communications Services, for example Picture Archiving Services (PACS), Ethernet cable/Data lines and Cloud computing when supplied as part of an IT system
• Computer consultants and other professionals where they are under the control and management of an outsourced provider and form a part of the overall procurement of an IT system designed to the department’s or trust’s specifications.
• License fees (including those delivered electronically, or delivered in a package containing a voucher or code to be redeemed electronically):
o supplied as an integral part of an IT system, whether for bespoke or
off-the-shelf software;
o for bespoke software
The Tax Centre of Excellence (TCoE) has published a joint TCoE, HMRC and
HMT “Agreed Principles – IT Licences” document at http://taxcentreofexcellence.uk/, which provides examples and clarification.
Excludes
• The supply, license and/or support of off-the-shelf software
• The hire, installation or purchase of hardware alone
• Line rental as a separate supply
• Telephony, which includes Voice Over Internet Protocol (VOIP) and videoconferencing
• Blackberry mobile phones, which are a telephony service
• Hire of computer consultants to add expertise to in-house IT teams and controlled or managed by those teams. This is a supply of staff rather than of IT services.
• Web design where purchased as a stand-alone supply – this may be eligible
for recovery under Heading 49
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Definitions and interpretative notes
‘An IT system’
An IT system itself can be made up of several packages which could be provided
by different suppliers, however as long as the packages, when linked together
form an entire IT system that has been built to the recipient’s specifications, this
would still qualify for recovery under this Heading.
HM Treasury’s view is that an ‘IT system’ could be a stand-alone system or equally
the system may form part of a larger IT system to be linked with the department’s
or NHS body’s overall IT network.
Therefore, VAT refunds under this heading are permitted where the recipient contracts with more than one supplier, provided the services across the contracts join together to provide an IT system. An example of this would be smaller contracts which, when joined together, form a tower IT system. This would also include any costs in relation to the build and support of the bespoke software which is provided as part of the contract.
VAT on qualifying services received as part of a wider supply that includes nonqualifying services or goods, for a single all-inclusive charge, is not eligible for refund unless the qualifying services are supplied under a separately ordered, negotiated and contracted agreement. The exception to this is where a government department or NHS body receives an IT system which includes telephony; in this instance, HM Treasury (HMT) require the VAT incurred on the contract to be apportioned between telephony and IT services. The VAT which relates to the IT services can be recovered under Heading 14 whilst any VAT incurred on telephony services cannot be recovered.
A VAT refund is permitted where goods are received as an integral part of a supply of qualifying services, are included in the contract for the qualifying services, and are ancillary to the qualifying services supplied.
*‘Bespoke software’ *
Bespoke software includes the creation of a new software package. This includes research and development, design and consultancy services. It may also include aftercare services such as updates and helpdesk facilities.
It also includes the substantial modification of a pre-existing package of software
to meet the needs of the recipient. In such circumstances, the key to qualification
for a VAT refund will be to consider the extent of the modification. Substantial
modification would require changes that effectively create a product that is
unrecognisable from the original. ‘Customisation’ or ‘personalisation’ of preexisting
packages are unlikely to be substantial modifications – they tend to be data
management/input issues rather than actual remodelling of the software.
Non-qualifying ‘off the shelf’ software is taken to mean stock software such as
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“Microsoft Office” packages, Sage accounting software, etc. These generally
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require minor modification during implementation and would not be eligible for recovery under Heading 14 unless supplied as a minor part of an entire IT system.
*‘Staff’ *
Where the supplier of IT services also provides staff, and that staff remain under the direction and control of the supplier, the staff are treated as part of the provision of IT services, and costs will be recoverable under this Heading.
In modern contracting situations there are a number of scenarios that can occur.
Treasury have therefore considered that the following four situations are likely to
occur: Where IT services and staff are provided by one supplier, and the
staff are under the day to day control of the government department/NHS, this is
a supply of staff and VAT is irrecoverable.
• Where IT services and staff are provided by one supplier, the staff are under the day to day control of the supplier, and the activities delivered meet the COS14 criteria, the VAT can be recovered.
• Where the government department/NHS procure an IT infrastructure from
one supplier and IT service staff from another supplier, and those staff are
under the day to day control of one of the suppliers, the VAT incurred on the
supply of staff can be recovered in line with the guidance at ‘An IT system’
above.
• Where the government department/NHS procure an IT infrastructure from one supplier and IT service staff from another supplier, and the government department/NHS has the day to day control of those personnel, this is still a supply of staff and any VAT incurred is irrecoverable.
The important point to note, therefore, is that recovery is only possible where the staff are not under the control of the government department or NHS body. If they are under the control of any other party, and the supply is an integral part of the overall infrastructure provision, recovery is possible.
‘Day to day control’: The TCoE has published a joint TCoE, HMRC and HMT
“Agreed Principles, guidance and FAQs – COS14 Resource & Digital Expertise”
document at http://taxcentreofexcellence.uk/, which provides examples and
clarification.
15 - Conference and exhibition services
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This Heading covers conference and exhibition services.
Includes
• A composite service which could include supplies of staff, hire of venue,
equipment, hotel accommodation, catering etc. The keyword is ‘services’ - to
qualify for recovery the government department or health authority must be
receiving more than a supply of accommodation and catering, and the services
must be in connection with their non-business activities
• Hire of exhibition space and associated services
• Hire of conference stands and associated services
Excludes
• The hire of venues alone
• The hire of hotel accommodation on its own
16 - Debt collection This Heading covers debt collection services supplied to a government department or health authority.
Includes
The provision of services by a professional debt collection
agency Bailiff services
17 - Departmental staff records and payroll
systems including administration and payment of
pensions This Heading allows recovery on the provision of services for departmental staff records and payroll systems, including administration and payment of pensions.
Includes
• Where you employ the services of outside contractors to deal with departmental personnel services, staff records and payroll systems
• Expert Actuary Services in respect of pensions
• Supplies by Civil Service Pensions and similar bodies
• Services supplied by the Government Actuarial Departments
Excludes
• Management of child care vouchers
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18 - Employment advisory services as directed by
the Race Relations Act 1976 The Race Relations Act 1976 has been repealed, therefore under this Heading you can recover employment advisory services as directed by the Equality Act 2010.
Includes
Supplies by Civil Service Policy
19 - Engineering and related process services
This Heading has a deliberately narrow application in that it excludes computer engineering.
Includes
• Recovery on manufacturing and the related commissioning processes
Excludes
• Installation of plant
20 - Environmental protection services of the kind normally carried out for the Department of the Environment, Food and Rural Affairs This Heading allows recovery on environmental protection services of the kind
normally carried out for the Department for Environment, Food and Rural Affairs
(DEFRA).
21 - Estate management services This Heading covers property where a government department or health authority holds either the leasehold or the freehold or Scottish equivalent.
It applies where a contractor manages and operates land and/or buildings for you (the building does not necessarily have to be occupied), for example where an estate agent is responsible for arranging the payment of rents and other charges.
The supplier’s services would probably include: dealing with any repairs and maintenance, arranging cleaning, reception, security, post etc. The estate management company will usually charge a monthly fee for such services.
Excludes
Separate recharge of utilities as these are supplies of goods
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22 - Export intelligence services This Heading allows recovery on export intelligence services.
23 - Filming, audio-visual and production services This Heading covers filming, audio-visual and production services.
Includes
• Commissioning a company to make in-house training films for example promotional videos, public awareness campaigns, etc
• Filming briefings, meetings or conferences
24 - Health promotion activities
This Heading covers health promotion activities.
Includes
Campaigns for stress awareness, giving up smoking, etc
25 - Hire of reprographic equipment including
repair and maintenance
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Under this Heading, ‘reprographic’ takes its everyday meaning and is the process of reproducing, reprinting, or copying graphic material especially by mechanical, photographic, or electronic means.
This Heading allows recovery on the hire, rental or lease of reprographic equipment but only where the agreement or contract provides for repairs and maintenance and where the provider retains ownership and responsibility for the equipment.
Includes
• Hire, rental or lease of reprographic equipment where the charge is
calculated on a ‘copy ‘or ‘click’ charge’ basis and the provider retains
ownership of the equipment, this also includes consumables provided as
part of the ‘click’ or ‘copy’ charge
• Multifunctional Devices (MFDs) which serve as printers, photocopiers and faxes
Excludes
• Hire, rental or lease of reprographic equipment where the agreement or contract does not include repair and maintenance
• Hire of Fax machines, as these are not primarily reprographic equipment
• Consumable supplied separately, for example, toner, fixing agents and
copier
26 - Hire of vehicles, including repair and
maintenance This Heading allows recovery where a government department or NHS body enters into a contract for the supply of a vehicle/vehicles and the repair and maintenance of these vehicles by the supplier is specified in the contract.
Includes
Contracts for the hire of pool cars, company cars or other vehicles where the contract includes repair and maintenance by the supplier
Excludes
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• Hire of vehicles alone where the contract does not include repair and maintenance, however the VAT on the separate supply of repair and maintenance will be recoverable under Heading 37
Additional information
• Where you have a contract which includes both the hire of vehicles without
repair and maintenance and hire with repair and maintenance, you can only
recover the VAT in relation to the element of the hire which include repairs and
maintenance.
27 - Insolvency services The costs of Insolvency Practitioners may be recovered under this Heading only if it can be demonstrated that that they are working under contract to a government department or health authority and that their services are being provided to the government department or health authority.
In many cases insolvency practitioners are seen as providing their services to the
business under their supervision and any VAT charge is proper to that entity rather
than a government department or health authority.
28 - Interpretation and translation services This Heading covers interpretation and translation services.
Includes
• Simultaneous translation services, for example in person, at events/meetings/interviews, via telecommunication media, etc Translation of documents
• Where an interpreter is needed during the course of treatment of an NHS patient
• Sign language
29 - Issue of documents to, and control of, bingo
halls and off-course bookmakers This Heading covers the issue of documents to, and control of, bingo halls and
offcourse bookmakers.
30 - Issue of documents under Wireless and
Telegraphy Act This Heading covers the issue of documents under the Wireless and Telegraphy
Act.
31 – Laboratory Services
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This Heading allows recovery where an NHS body or government department has
contracted out its laboratory services. Laboratory services are defined as services
of conducting scientific experiments, tests and investigations whether in a
laboratory building or via a technological process.
Includes
• Drug testing
• Forensic testing
• Managed laboratory services
Excludes
• Stand-alone supplies of laboratory consumables for example, reagents, chemicals and test tubes which are supplies of goods
• Separate lease/hire of laboratory equipment
Additional information
The supply of laboratory pathology services that directly relate to the provision of
healthcare for individual patients is exempt from VAT and thus there is no VAT to
recover. This applies to all businesses that are state-regulated and supply
laboratory pathology testing services, whether they supply the services to the NHS
or to independent hospitals.
32 - Laundry services This Heading covers the provision of laundry services.
Includes
• Towel hire and cleaning and laundering of towels
• The provision of linen, which is exchanged on a regular basis for laundering, but remains the property of the company providing the service
• Cleaning and laundering of uniforms and fabrics
• Dry cleaning services
• The cleaning or redressing of wigs, for example, for cancer units
33 - Library services
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This Heading covers the use of external libraries such as university libraries, independent academic libraries and electronic/online library services.
Includes
• Internet hosted library services which provide access to backdated journals, periodicals, medical books, etc
Excludes
• Subscriptions to publications, electronic journals, single online journals,
magazines, etc
34 - Maintenance and care of livestock and fauna in
connection with the Royal Parks
This Heading covers maintenance and care of livestock and fauna in the Royal Parks.
Includes
• Veterinary costs
• Tree surgeon’s services
• Vaccination programmes
35 - Maintenance, non-structural repair and
cleaning of buildings
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The key to this heading is that it does not cover structural work such as the alteration of a building or the construction of an extension. The building can either be held under a freehold or a leasehold interest, but the heading does not include the service charges which are included in the lease as these are normally regarded as additional rent, and therefore further consideration for the occupation of the building.
Although in principle a ‘line by line’ calculation for each item of work is acceptable, some easements have been agreed for government departments and NHS bodies – see below:
Recovery of VAT on a line by line basis
Go through Bill of Quantity/Tender documents etc. and decide what is fullyrecoverable, non-recoverable and Pot (mixed - unable to separate).
With Preliminaries – if you have a detailed breakdown and can separately identify qualifying items (professional services, security, and so on), these can be added to fully-recoverable figure, with the rest in non-recoverable, or the whole figure can be added to Pot (mixed). This is an either/or, what you cannot do is strip out fully recoverable and add rest to Pot.
If a piece of work can be easily differentiated between fully/non-recovery - for
example, “Supply and fit 20 doors (16 replacement / 4 new)”, 80% of price can be
added to fully-recoverable and 20% to non-recoverable. If the description just says
“Supply and fit 20 doors”, this would be added to the Pot.
When this is completed, the formula to find out the provisional percentage recovery on all interim payment invoices is: Fully-recoverable ÷ (Fully-recoverable + Non-recoverable) = Percentage
Headings such as Provisionals, Overheads and Profit, Contractors margin, and so
on should be placed in the Pot; Contingencies should be ignored until the end of
the project, when it will become clear if any have been spent. Capital projects
should be reviewed annually or at the end of the project whichever is sooner.
Where work is carried out to meet H&S or fire regulations, this does not mean you
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can just claim back everything. The work must still be listed on repairs and maintenance list to qualify for recovery.
Easements for government departments
In the case of government departments, it is acceptable to refer to government accounting principles to determine whether work is or is not structural. Work funded from running costs (revenue spending) is accepted as non-structural and therefore within the scope of this heading, whereas work funded from capital expenditure is not.
Easements for NHS bodies
Construction projects below £5000
HMRC have agreed with the Department of Health that construction works costing under £5000 (excluding VAT) may be treated, as repairs and maintenance and the VAT element are refundable under the Contracted-Out provisions.
The Department of Health Circular EL (90) P64 defines such work as “individual
works schemes for the initial provision, extension improvement or adaptation
(including upgrading), renewal, replacement or demolition of buildings, building
elements (e.g. roofs), external works, engineering services or plant”.
Each project, however, must be complete and self-contained. A large project cannot be split into individual elements to bring the cost down, per element, to below £5000. It will only apply where the project is undertaken in its own right and not as part of a larger project.
Capital Building Projects
By Capital building projects, we mean those projects that involve building and construction works which will normally take weeks/months or even years to complete. These projects will often include costs for works that are either eligible or ineligible for VAT recovery.
Capital building projects are dealt with under the COS rules; however, VAT is only recoverable on the repair & maintenance costs not replacement. On projects where there are alterations, extension, modification there would be little scope for recovery as this ceases to be repair and maintenance.
On new builds, only professional services may be recovered where the supply is outside of the main contract and is to the NHS body direct.
For example, where you are having an extension built, and you are knocking
through from an existing building, there would be little scope to recover VAT on
making good damaged walls/plaster as this would be considered disturbance
works. However, if you were taking advantage of repairing e.g. wires, plumbing on
the existing building at the same time, this would be recoverable.
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How to calculate VAT recovery
NHS bodies can determine the correct VAT recovery on capital building projects in two ways. They can either go through the relevant documents in their possession such as bills of quantity/ schedules of work etc. on a ‘line by line basis’ determining which works are eligible for VAT recovery and then recover these costs subject to the normal VAT rules or NHS bodies can use the ‘banding scheme’ which involves simply determining what type of project is being undertaken and recovering that % applicable to the project invoices/ interim certificates see below.
Recovery of VAT using the ‘banding scheme’
To reduce the burden of the tax further, NHS bodies have the option to determine simply the element of VAT recoverable on contracted out services on those capital-building projects of a total cost of up to £15,000,000. Having decided the type of project involved from the following list, the recovery rate shown is applied to the invoiced VAT incurred on the project for inclusion on the monthly VAT 100 and accompanying VAT21.
PROPORTION OF
TYPE OF
DEFINITION VAT
PROJECT
RECOVERABLE
Complete new construction from scratch
or making use of the foundations of an
New build existing building, where the whole of the 0%
former building has been demolished to
ground level.
Where a building is enlarged or extended
Extensions and that enlargement or extension 5% creates new space.
Works to an existing building where major
work has taken place to the fabric
Major Alterations of the original building including the 20% replacing of
much of the internal/external configuration.
Work to an existing building where the
alterations are incidental to and have
Minor Alterations 40%
occurred because of repair/maintenance
work.
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This is general upkeep to and
Refurbishment /
refurbishment of existing buildings where
Repair and 75% the works do not result in any
alteration maintenance or additions.
These bandings apply only to actual construction works. Subject to the normal rules, NHS bodies may continue to recover VAT incurred on supplies received directly of professional services (for example, architects).
Additional information
Examples of what is included or excluded under Heading 35 can be found at
VATGPB10435.
36 - Maintenance and repair of civil engineering
works Under this Heading civil engineering takes its everyday meaning and includes for example bridges, drains, roads, car parks, footpaths etc.
Excludes
• Repair and maintenance of road schemes. This work falls under Heading 6
New civil engineering projects • Supplies carried out under section 278 agreements. This work falls under
Heading 6 • Winter road gritting and cleaning services
37 - Maintenance, repair and cleaning of equipment,
plant, vehicles and vessels
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This heading allows government departments and NHS bodies to recover VAT on:
Repair, maintenance and cleaning of equipment, plant, vehicles and vessels
that they own, and/or
• Repair, maintenance and cleaning of equipment, plant, vehicles and vessels that are leased. This is providing that the repair and maintenance work is supplied under a separate contract or agreement from the lease but it does not have to be made by a different supplier. Where the lease and maintenance are provided by the same supplier, the contracts/agreements must not be interdependent on each other and must be separately enforceable.
Additional information
• For the purposes of COS recovery, the term vessels includes ships and aircrafts and the term equipment includes computer equipment
• VAT incurred on the leasing or hire of equipment, plant, vehicles and vessels is
not eligible for recovery. The only exceptions to this are Headings 25 ‘Hire of
reprographic equipment including repair and maintenance’ and Heading 26
‘Hire of vehicles, including repair and maintenance’. In both these cases, the VAT is only recoverable on contracts that provide for the supply of the equipment/vehicles together with full repair and maintenance services
Examples of what is included or excluded under Heading 37 can be found at VATGPB10435.
38 - Maintenance and repair of statues, monuments
and works of art This Heading covers the maintenance and repair of statues, monuments
and works of art. Includes
• Cleaning
• Restoration costs
• Removal & relocation costs
Excludes
• Expenses relating to the design and installation of new monuments
39 - Medical and social surveys This Heading is specifically designed to allow recovery on surveys which were
previously carried out in-house which are now outsourced to private sector
providers and where the results are to be used for non-business activity.
40 - Messenger, portering and reception services
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This Heading covers messenger, portering and reception services.
Includes
• Collection and distribution of internal mail by a private company
• Patient appointment/reminder services
• Portering services such as the movement of patients and equipment around hospitals
• Movement of corpses by funeral directors to or from the hospital site
Excludes
• The hire of telephone equipment/telephone lines or switchboard equipment alone
• Hire of agency staff to supplement in-house services during peak times or to
cover leave
41 - Nursing services This Heading is intended to allow recovery on nursing services in its widest sense
and there is no stipulation that the nursing staff have to be providing medical care.
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The Royal College of Nursing define nursing as “the use of clinical judgement in
the provision of care to enable people to improve, maintain, or recover health, to
cope with health problems, and to achieve the best possible quality of life,
whatever their disease or disability, until death”.
Includes
• Situations where you are charged VAT on the provision of nursing services or agency nursing staff, this would include:
o All grades of registered bank nurses, working on wards across the
NHS o Healthcare Assistants
o Midwives and midwifery assistants o Phlebotomists o Theatre Scrub
nurses
o Nurses employed by the 111 service
o Operating Departmental Practitioners (ODPs) where due to the changes in the nature of their role, they now provide a nursing services. Previously ODPs were excluded from Heading 41 as they were not providing a nursing service.
Excludes
• Other types of medical professionals such as doctors, locums
• Other healthcare professionals such as ambulance paramedics
Additional information
You should not assume that there is a VAT element included in the charge made
to you for nursing services, as the supply may be exempt from VAT. You should
check the suppliers invoice to check whether VAT has been charged.
42 - Office removals This Heading covers services involved with office removals.
Includes
• Office relocation contractors
• Provision of removal services
• Crate hire when part of a removal contract
• Contractors moving office accommodation, for example from one floor to another
Excludes
• Crate hire alone
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43 - Operation and maintenance of static test
facilities, engineering and support services and
test range industrial support and security/safety
services including those acquired for the purposes
of research and development This Heading covers operation and maintenance of static test facilities,
engineering and support services and test range industrial support and
security/safety services including those acquired for the purposes of research and
development.
44 - Operation and maintenance of stores depots This Heading allows recovery where you employ an external contractor to operate and maintain your stores depot.
Includes
• Monitoring stock levels
• Dealing with requisition requests
• Contracting out the management (and running) of your stocks of items and equipment - such as dressings, medicines, lotions and stationery used in the provision of non-business healthcare.
Excludes
• The supply of the goods being stored
Additional information
Where you have a single contract for the operation and maintenance of your
stores depot and for the supply of the goods, VAT can only be recovered on the
service element of the contract where this is shown as a separate charge on the
invoice.
45 - Operation of hospitals, health care
establishments and health care facilities and the
provision of related services
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This heading concerns the operation of healthcare premises that have face-to-face dealings with patients. The contractor does not have to provide, and is unlikely to be providing, healthcare. Thus, the focus of the heading is on the situation where the contractor provides a fully functioning building or facility within which medical and nursing professionals can treat and care for their patients. For example, the contractor may provide full facilities management support, IT support, catering, cleaning and security using its own employees (or the services of companies it sub-contracts work to). An agreement that consists of an ordinary premises lease with standard communal services only will not be covered by this Heading.
The origins of this heading lay in the type of PFI arrangement that was prevalent in
the 1980s and 1990s. Over time, this type of arrangement has changed, either in
terms of the level of services provided or the facility in which they are provided, but
the principle remains unchanged – the contractor provides a sufficient level of
services and support within the building or facility for the NHS (or other healthcare
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provider) to treat its patients. It covers PFI, PF2, Scottish Hub Procurement Arrangements, LIFT and non-PFI situations.
A hospital, health care establishment and health care facility is the building or facility which enables the medical and nursing professionals to treat and care for their patients and includes:
• An entire hospital complex of buildings
• Part of a hospital complex of buildings
• A discrete part of a hospital, such as a ward, a theatre suite, a radiology department, a renal dialysis suite, a diagnostic suite or an MRI unit
• An off-site facility that provides services which would normally be carried out in a hospital or health care establishment, for example an off-site facility for renal dialysis or diagnostic purposes
• Non-residential mental health facilities which are part of the healthcare offered by the NHS body
Includes The ancillary provision of equipment together with the service of
operating and maintaining that equipment, for example heating, cooling and
ventilation equipment; fire protection equipment; specialised lighting; nurse call
systems; and medical gas supply piping
• Utilities when provided as a part of the whole package under the same contract and paid for within the single unitary charge - the utilities may be invoiced separately to the rest of the charges
• Hyperbaric chambers/mobile theatres, as long as these are supplied on a fully managed and serviced basis
Excludes
• The hire of equipment alone
• The separate supply of utilities
46 - Operation of prisons, detention centres and
remand centres, including medical services
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The origins of this heading lie in the outsourcing of the running of a prison to a private sector company - custodial services, rehabilitation and education, building maintenance, catering etc. However, it can extend to discrete activities within a prison.
Includes
• Operation of prison shops
• Prisoner transport
• Operation of prison hospitals
Excludes
Hostel accommodation
47 - Passenger transport services The hire or lease of a vehicle without a driver would not be covered under this Heading, but may be eligible for a refund under Heading 26.
Includes Taxi firms that supply taxis to staff on request provided the
government department or health authority has entered into a contract with
the firm and receives a tax invoice, e.g. late night car services
• Chauffeur driven cars provided the government department or health authority has entered into a contract with the firm and receives a tax invoice
• Services of an outside contractor to transport passengers/patients
• Where a hospital hires or leases a vehicle with a driver for transporting inpatients, outpatients, hospital staff or other individuals (e.g. private specialists/consultants), providing it is in connection with the non-business activity of the provision of NHS health care
Excludes
• Public transport costs - these are already zero-rated
• Road tax
• Passenger insurance
• Staff members hailing cabs in the street or picking up a taxi from a taxi rank
• Passenger transport services used for the transport of private patients or for a
consultant providing health care to a private patient would not be eligible for a
refund as it would be in connection with an exempt business activity and the
normal VAT rules would apply
48 - Pest control services
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This Heading allows recovery on pest control services.
Includes
• Setting of traps
• Spraying insecticide
• Laying down poison
• Removal of dead rodents
• Disinfestation
Excludes
• The purchase of goods such as products designed for pest control, for example
poisons, traps, etc
49 - Photographic, reprographic, graphic and
design services
This Heading allows recovery on contracted out photographic, reprographic, graphic and design services.
Includes
• Hire of a photographer
• Design & printing of annual reports
• Bulk copying services
• Design and redesign of a website
Excludes
• Purchase of photocopiers etc.
• Printing of business cards and headed stationary – these may be recoverable under Heading 61
• Printing of office signage
50 - Preparation and despatch of forms This Heading covers the preparation and despatch of forms.
Includes
Design, printing and mailing of forms, providing these services are provided
within a single contract
51 - Press cutting services
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This Heading allows recovery where you use an outside contractor to provide you
with a physical or electronic press cutting service, for example you are supplied
with copies of all articles in the national and/or local press of particular relevance
to your government department or health authority.
52 - Professional advice or opinion on
departmental efficiency or policy issues, legal
advice or opinion and internal audit Note: This heading is currently under review with HM Treasury. Government departments and NHS bodies should continue to use the guidance detailed below until further details are provided by HMRC.
Government departments
The wording of this heading was amended in 2008. It used to read “Professional
services, including those of any manager, adviser, expert, specialist or consultant”,
but the change clarified that the scope of recovery under the heading is confined to
provision of advice or information on departmental efficiency, policy development,
legal advice or opinion and internal audit.
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Includes
• Internal audit reports.
• Legal opinions from solicitors.
• Hire of consultants to provide advice on efficiency issues or comment on the viability of new departmental initiatives.
Excludes
• The hire of a consultant to work as part of the Department.
• Research - this is covered by Headings 20, 58, 59, 66 or 74.
• The service of actually putting something into effect, as opposed to merely advising on a matter. For example, the services of a professional who is brought in to advise on AND then implement a new initiative.
• Staff secondments - because this involved contracting in staff to work alongside.
• Specialist staff hired to provide “holiday/ maternity cover” for key staff members.
• Hire of accountants to carry out tax health checks.
Additional information
HM Treasury wrote to Government Departments on the 14 April 2014 about
Shared Service Arrangements and refunds under this heading for Non-Criminal Legal Services. In so far as the Treasury directs HMRC in individual cases, VAT can also be recovered on other non-criminal legal services. There have so far been no such directions.
NHS bodies
VAT is recoverable on the professional services of managers, advisers, experts, specialists and consultants in providing advice or information on how to put something into effect. The eligible services are therefore of an advising nature, rather than of implementing a change, taking action following a recommendation, etc. In relation to building works and construction, the professional fees of architects and structural engineers are included, as is consultancy advice on planning site layouts and the services of solicitors, valuers and surveyors. VAT is eligible for a refund irrespective of whether the fees relate to repairs and maintenance or new construction or improvements or refurbishment etc.
This category is not restricted to professional fees in connection with construction
work. It also covers professional fees such as those in connection with computer
consultancy work, including contract software development.
53 - Provision under a PFI agreement of
accommodation...
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Provision under a PFI agreement of accommodation, or office or other
governmental use, together with management or other services in connection with
that accommodation
This heading covers PFI arrangements under which government departments/NHS bodies are supplied with fully serviced and managed accommodation by a single PFI provider. The most distinct element will be that risk is transferred from the government departments/NHS body to the PFI provider. Consequently, the heading does not include leases granted by commercial landlords, even where they are landlord repairing and insuring leases.
Additional information
• Recovery under this heading is only allowed on utilities when provided as part of the supply of PFI accommodation and where the cost is subsumed within the single unitary charge. This is seen as a necessary incidental cost of providing the accommodation.
• Utilities provided outside the PFI charge will not qualify for relief under this
Heading.
54 - Publicity services This Heading allows recovery on publicity services.
Includes
• Advertising campaigns other than recruitment adverts (which are covered by heading 57)
• The use of a private publicity agency for dealing with the media Press releases
• Digital publicity services, for example illuminated portable posters and video walls
Excludes
• Commissioning promotional items such as mugs, T-shirts, stickers etc. This is a supply of goods for VAT purposes and as such falls outside the scope of the Direction
• The direct placing of an advertisement, for example in a newspaper
55 - Purchasing and procurement services
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This Heading allows recovery on purchasing and procurement services i.e. the procurement service charge.
Includes
• Negotiating procurement contracts
• Management and co-ordination of bulk orders
• Cloud based procurement services
• Government procurement services
• Where you use a buying agent or private firm to carry out your purchasing, then any VAT incurred on the buying agents services would be eligible for recovery under this heading
Excludes
• The actual cost of the goods procured
56 - Radio services This Heading allows recovery on radio services.
Includes
• Radio broadcasting
• Radio bandwidth
• Contracting out of services connected to the running of a hospital radio
Webcasting
• Provision of radio communications network for NHS ambulance Trusts and handsets when supplied as part of the communications network
Excludes
• Purchase of radios or radio equipment alone
• The supply of car radios or radio masts
57 - Recruitment and relocation of staff and other
related services
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This Heading allows recovery on recruitment and relocation of staff and other related services.
Includes
• Security vetting checks undertaken on employees including Disclosure and Barring Service (DBS) checks
• Staff relocation expenses where the department commissions the removal company
• Staff recruitment advertising commissioned via a recruitment agency
• Civil Service Resourcing
• If you use an agency to arrange for the recruitment of staff, the VAT would be refundable under this heading. This would include services provided as part of a recruitment drive
• You may incur VAT, which would be eligible for a refund under this category, if, for example, you were to open a new hospital or move to a new building and used a private company to deal with the relocation of the staff
Excludes
• VAT incurred on removal firms hired by staff
Placing recruitment adverts in a newspaper or on internet recruitment websites
Additional information
VAT incurred in respect of the recruitment of canteen staff, for example, would
only be eligible for a refund under these provisions to the extent that it relates to
the supply of catering for NHS in-patients as part of the provision of NHS Health
care.
58 - Research, testing, inspection, certification and
approval work for the Health and Safety Executive This Heading covers research, testing, inspection, certification and approval work for the Health and Safety Executive (HSE).
Devolved administrations discharging functions on behalf of the HSE may recover
VAT on contracted out services under this Heading.
59 - Scientific work of the kind normally carried out
for the Department of the Environment, Food and
Rural Affairs and the Food Standards Agency
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This Heading allows recovery for scientific work of the kind normally carried out for the Department for Environment, Food and Rural Affairs and the Food Standards Agency.
Includes
• Testing contaminated food to identify strains of bacteria e.g. salmonella
• Detection and verification of disease in animals e.g. BSE
• Detection and verification of plant disease e.g. Dutch elm disease
Inspection of diseased animal carcasses
Additional information
This Heading may be used by departments in the devolved administrations if they
have taken over responsibility for work undertaken by DEFRA or the Food
Standards Agency.
60 - Security Services This heading allows recovery for the security services.
Includes The provision of security guards and staff security surveillance
equipment (CCTV, surveillance cameras), security patrols and the secure
transport of equipment
Lone worker monitoring of staff
Excludes
• Purchase of security equipment only would not be eligible as this would be a supply of goods
• Security vetting - this may be recoverable under Heading 57
• Hire of security staff to supplement in-house security teams, for example to provide holiday cover
• VAT incurred on the repair and maintenance of security equipment - this may
be recoverable under Heading 37
61 - Services of printing, copying, reproducing or
mailing of any documents or publications,
including typesetting services
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Includes
• Post opening services
• Franking
• Labelling services including printing of bespoke forms, labels, cards, reports, letterheads etc. (bespoke means from scratch designed specifically for the government department/NHS body)
• Parcel X-raying services
• Photocopying services supplied by outside firms
• Services of mailing agencies
• Printing services or reproduction of documents or publications for example, annual reports
• Typesetting services
• Micro filming and microfiche services
Excludes
• Post box hire
• Shredding machines Franking machines
Additional information
• In the case of printing services, although the supply of the paper is a supply of goods, it is considered an intrinsic part of the service being provided (for example, it is impossible to receive the service of printed letterheads without the paper on which the letterhead is printed). Therefore, the VAT would be eligible for recovery on the total contract price, which will normally include that of typesetting, paper and the use of the printing or embossing machinery.
• The initial supply of signs and names badges (also the complete replacement
of) is not eligible for recovery, as they are seen as goods. Signs replaced
because of government departments/NHS bodies merging would be
recoverable, as would repairs to existing signs.
62 - Share Registry Survey This Heading allows recovery on the share registry survey.
63 - Storage, distribution and goods disposal
services
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This Heading covers both physical and electronic storage and distribution
services as well as physical goods disposal services. Includes
• Records sent for archiving or destruction
• Storage of detained or seized items
• Secure disposal of seized items
• Accommodation of seized or detained animals in zoos or boarding kennels
• Storage of employees’ possessions when they are relocated
• Incineration services
• Secure bulk shredding services
• Call-off stock
Additional information
Changes were introduced by the Finance Act 2012, which required the standard rate of VAT to be applied to supplies of storage facilities with effect from 1 October 2012, further details can be found at VATLP17550 (external users can find the guidance at http://www.hmrc.gov.uk/manuals/vatlpmanual/VATLP17550.htm)
A definition of storage can be found at VATLP17600 (external users can find the
guidance at http://www.hmrc.gov.uk/manuals/vatlpmanual/VATLP17600.htm)
64 - Surveying, certification and registration in connection with ships and relevant record-keeping and verification, issue of certification, cards,
discharge books and campaign medals to seamen This Heading covers surveying, certification and registration in connection with
ships and relevant record-keeping and verification, issue of certification cards,
discharge books and campaign medals to seamen.
65 - Training, tuition or education There is no general restriction under this Heading. This includes on-line training and training provided for example by lecturers, external organisations etc.
You should note that education and vocational training is exempt from VAT (so
there is no VAT to recover) if it is provided by one of the ‘eligible bodies’ listed in
Notice 701/30: “Education & Vocational Training”. In practice these are:
1. Schools for the under-19s
2. Universities
3. Further and Higher Education colleges
4. Other public bodies
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5. Non-profit making bodies that reinvest surpluses of income back into the courses they provide
Includes
• VAT incurred on costs which relate to non-business training activities
Excludes
• VAT incurred on separate supplies of accommodation, meals and room hire
66 - Transport research of the kind normally
carried out for the Department for Transport This Heading allows recovery on transport research of the kind normally carried out for the Department for Transport.
Departments in the devolved administrations which carry out functions delegated
to them by the Department for Transport may recover VAT incurred on transport
research under this Heading.
67 - Travel services, excluding hotel
accommodation and fares This Heading allows recovery on travel services but excludes hotel accommodation and fares.
Includes
• Travel arrangements provided by an external booking agency
• Charges for use of VIP lounges at airports and stations
Excludes
• Public transport fares as these are zero-rated
• VAT paid by third parties in respect of taxis and hire cars. The recovery of VAT
on hire cars and taxis depends on the arrangements with the provider and who
is receiving the supplies, the government department/health authority or the
individual
68 - Travel and transport surveys, including traffic
census counts This Heading covers travel and transport surveys, including traffic census counts.
69 - Typing secretarial, telephonist and clerical
services including agency staff This heading covers the outsourcing of typing, secretarial, telephonist and clerical
service functions. It does not include the hire of typists, secretaries, administration
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staff and agency staff, for example to fill short-term vacancies or supplement existing staff levels during busy periods.
The words ‘including agency staff’ needs to be read in the context of the whole sentence, rather than in isolation. The agency staff referred to in the heading are those of the company supplying outsourced typing, secretarial, telephonist and clerical services.
Includes
• Provision of typing services by a word processing bureau
Excludes
• Secondees
• Employee expenses
• Hire of telephones, telephone lines, switchboard equipment etc.
• The hire of agency staff - for example, to fill long-term or short-term vacancies
70 - Waste disposal services This Heading allows recovery on waste disposal services.
Includes
Collection and waste disposal services such as:
• Refuse collection
• Trade waste
• Feminine hygiene services
• Clinical waste
• Recycling services
• Removal of ash, incineration services and sludge disposal
• The supply of incineration waste products, or for the use or hire of incineration
facilities
• The removal, conveyance, treatment or disposal of the contents of cesspools, septic tanks or similar receptacles
• Hire of rubbish skips and wheelie bins, where full containers are exchanged for empty ones by an outside firm
Excludes
• Purchase of waste disposal equipment as this is a supply of goods
• Disposal of construction waste in the course of repair & maintenance, which
may be incorporated within Headings 35-37
71 - Welfare services
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This Heading refunds VAT incurred on outsourced welfare services supplied only
to staff members of the Government Department or health authority.
Includes:
• Staff support services
• Counselling services provided to staff, for example in the aftermath of major incidents
• The provision of care, treatment or instruction designed to promote physical or mental well being
Exceptions
However, there are two exceptions to the staff only rule, where the Government Department or health body also has a duty of care for other individuals:
• Prison inmates, and
• Hospital inpatients
In these instances, the definition of ‘welfare’ has a wider application, and therefore includes the provision of social work where necessary. Nevertheless, this recovery is only allowable to the point that the recipient is still an inmate or inpatient. Once the recipient ceases to be such, any continuing services supplied to them, and paid for by the Government Department or health body, ceases to be recoverable and is simply an overhead of that organisation
Additional information
Many of these educational welfare services will be exempt from VAT so there will
be no VAT to recover.
72 - Career guidance, mentoring, counselling and other related services to help people in to work or to retain work as part of the DWP/Jobcentre Plus Employment Programme, provided under sections 2 and 9 of the Employment and Training Act 1973
Although this Heading refers to the DWP and to an English statute, it is to be read
as including any equivalents in Northern Ireland, Scotland and Wales.
73 - Services relating to Action Teams for Jobs and
Employment Zones The old Heading which allowed recovery on ‘mentoring and counselling to help
people in to work as part of the New Deal and ONE Programme’ has been
withdrawn. This is because activities which used to fall under this Heading have
largely been absorbed in to the newly reworded Heading 72.
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74 - Original research undertaken in order to gain
knowledge and understanding Whilst there is no general restriction under this Heading, the term ‘original
research’ is interpreted as meaning research that:
a) Involves surveys, field tests or new research design thinking, interviews or observation conducted specifically in relation to the subject of the research (as opposed to merely collating existing data); and
b) Extends to secondary data analysis, interpretation (which may include
options and/or recommendations) or a systemic review of evidence (rather than
mere data gathering and recording)
75 - Inspection of woodland sites for approval of
felling licence applications and of timber
imports/imports using timber packing to prevent
entry of foreign tree pests and diseases This Heading covers inspection of woodland sites for approval of felling licence
applications and of timber imports/imports using timber packing to prevent entry of
foreign tree pests and diseases.
76 - Probation Services delivered under the
Criminal Justice and Court Services Act 2000 This Heading now applies to the Offender Management Act 2007.
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Annex A- Examples of items that are eligible for
recovery under COS Headings 35 and 37
Please note that this list is not exhaustive. If you are uncertain whether or not the
works undertaken is eligible for VAT recovery please seek advice from HMRC.
Alarms
COS
DESCRIPTION RECOVERY
HEADING
Repairing existing fire/burglar alarms Yes 35
Installation of fire/burglar alarms No
Extension to current systems No
Repair by partial replacement of parts within existing
fire/burglar alarm Yes 35
The complete replacement of an existing system
Asbestos
DESCRIPTION RECOVERY COS HEADING
Removing asbestos Yes 35
Sealing in asbestos Yes 35
Ceilings
No
DESCRIPTION
COS
RECOVERY
HEADING
Repairing existing ceiling/suspended ceiling Yes 35
Replacing existing damaged tiles in same location
(within existing grids structure) Yes 35
Forming fire breaks in ceiling voids No
Construction/installation of new ceilings/suspended
ceilings No
Complete replacement of suspended ceiling structure No
Cleaning
DESCRIPTION RECOVERY COS HEADING Contract
cleaning Yes 35
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Construction
COS
DESCRIPTION RECOVERY
HEADING
Building new cool room No
Construction of a new room No
Building new extension No
Major building improvements No
Installation of a new damp proof course No
Installation of a silicone based injection No
Single supply of scaffolding No
Structural repairs not traditionally performed in-house, as No
the work requires highly specialised skills
Complete replacement of central heating and air No
conditioning systems
Conversions
COS
DESCRIPTION RECOVERY
HEADING
Converting an office space from small offices to open No plan or vice
versa
Decorating
COS
DESCRIPTION RECOVERY
HEADING
Repainting and decorating existing walls, windows etc to Yes 35 restore decorative order
Re-painting existing external structure Yes 35
First time decoration No
Resealing against damp and draughts
Doors
Yes 35
COS
DESCRIPTION RECOVERY
HEADING
Fitting fire doors in corridors to form a fire break No
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Widening doors to allow wheelchair access No
Blocking up old/existing doorways No
Installing new doors/door frames where none existed No previously
COS
DESCRIPTION RECOVERY
HEADING
Installation of automatic/electric doors No
First time fitting of fire doors in new buildings/
extensions No
Fitting fire doors in new partitions No
Repairing by replacing existing doors/fire doors/ door
frames (see Note) Yes 35
Replacing existing doors with fire doors (see Note) Yes 35
Note: Exceptions to normal COS rules, where HMRC accept the concept of repair by
replacement for the listed items only.
Electrical
Electrical works would include items such as installation of luminaries, general
lighting, small power, nurse call systems, electrical connections to other systems.
VAT recovery will be dependent upon the context of the specific job being
undertaken - for example, if purely refurbishment, more scope expected for VAT
recovery. If major alteration/reconfiguration, limited scope for recovery.
COS
DESCRIPTION RECOVERY
HEADING
Extension of wiring into new areas No
Installation of new emergency lighting/fire signs No
Installation/replacement of Building Management System No
Installing new/additional wiring and/or sockets No
Installing new/additional wiring and/or light fittings No
Installing new/addition cables/wiring for telephone/data
No lines
Complete removal and replacement of wiring back to No
distribution boards
Repair by replacing existing wiring/cabling, individual
sockets and light fittings, if in exactly the same location Yes
(see Note)
35
Portable Appliance Testing (PAT) Yes 37
Note: Exceptions to normal COS rules, where HMRC accept the concept of repair by
replacement for the listed items only.
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Equipment/parts
COS
DESCRIPTION RECOVERY
HEADING
Sterilisation of instruments and equipment Yes 37
Spare parts which are provided as part of the eligible
repair and maintenance services Yes 37
Maintenance of security equipment
Fire Escapes
DESCRIPTION RECOVERY COS HEADING
Replacing fire escapes No
Repairing fire escapes Yes 35 Building new fire escapes No
Flooring
Yes 37
COS
DESCRIPTION RECOVERY
HEADING
Breaking up existing concrete floors and subsequent Yes relaying at a slight different floor level
Repairing existing stuck down flooring by rescreeding and
35
resurfacing bonded fitted flooring, including stuck down carpet, carpet tiles, floor tiles and vinyl
Replacing worn flooring with the same type of covering,
Yes 35
such as replacing carpet with carpet, linoleum with
linoleum, and so on
Yes 35
Supplying first time flooring No
Installing plywood base to level floor No
Upgrading worn floor covering, for example replacing linoleum with carpet, or replacing carpet with wooden flooring
Grounds
No
COS
DESCRIPTION RECOVERY
HEADING
Maintenance of grounds and gardens adjacent
buildings Yes 35
Gardening Yes 35
Grass cutting Yes 35
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Tree surgery Yes 35
Landscaping/redesigning grounds No
Incinerators
COS
DESCRIPTION RECOVERY
HEADING
Repair of incinerator Yes 37
Installing new incinerator No
Construction/extending height of chimney No
Replacement of incinerators No
Increasing thickness of existing lagging on No
incinerators
Insulation
DESCRIPTION RECOVERY COS HEADING
First time installing of insulation No
Installing sound proofing panels No
Repair by replacing lagging Yes 35
Kitchen
COS
DESCRIPTION RECOVERY
HEADING
Repair by resurfacing existing worktops and units Yes 35
Installing/building new kitchen units, cupboards, and so No on
Installing/building new work tops No
Repair by replacing existing kitchen units, cupboards etc
Yes 35 within
kitchens/tea points (see Note)
Note: Exceptions to normal COS rules, where HMRC accept the concept of repair by
replacement for the listed items only.
Lifts
DESCRIPTION RECOVERY COS HEADING
Repairs to existing lifts Yes 37
Replacement of lift No
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Installing a new lift No
Mechanical
Mechanical works would include items such as pipe work, ductwork, heating units,
chiller units, chilled water plant, air handling units, hot and cold water plant,
compressed air systems, medical gases and soil and waste pipe work.
COS
DESCRIPTION RECOVERY
HEADING
Repairs to faulty systems (including parts) Yes 37
Replacement of system No
Installation of new system No
Alterations/additions and extensions to existing system
Fixing valves and/or meters to existing/new radiators,
No
pipes and taps to regulate temperate of hot water for
patient safety/energy conservation purposes
Yes 37
Repair existing pipes/radiators Yes 37
Installation of new/addition pipes/radiators No
Replacing water tanks No
Building/installing new water tanks No
First time installation of boiler No
Replacement of boiler No
Repair to boiler (including parts) Yes 37
Complete replacement of central heating system No
Installation of new central heating system No
Testing and Commissioning No
Repairing by replacing existing pipes/radiators in same Yes 35
location (see Note)
Note: Exceptions to normal COS rules, where HMRC accept the concept of repair by
replacement for the listed items only.
Miscellaneous
COS
DESCRIPTION RECOVERY
HEADING
Minor works of a repair and maintenance nature Yes 35
Disturbance works, where those works only need to be
undertaken as a result of alterations to a building or as a
result of new building works
No
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Fitting of fire hoses/extinguishers No
Fitting of grilles, bars, locks, window film and security
cameras No
Installation of shelves No
Replacement of shelves No
COS
HEADING
Breaking up and removal of covers to existing manholes
Yes 35 and
their re-provision in the same place at a higher level
Resurfacing existing non-fee paying car parks Yes 35
Resurfacing existing footpaths Yes 35
Relaying down to foundation of existing footpaths No
Road cleaning Yes 35
Building new car park/footpath where one did not previously exist
Roofs
No
DESCRIPTION
COS
RECOVERY
DESCRIPTION RECOVERY
HEADING
Manufacturers warranties which are included in the
purchase price of the goods, this is a single supply of
goods
No
Maintenance contracts entered into after the
manufacturer’s warranty expires
Ramps
Yes 37
DESCRIPTION
COS
RECOVERY
HEADING
Repair existing ramps/handrails for access for the
disabled Yes 35
Replacing/altering of ramps/handrails No
Initial provision of ramps/handrails including replacement of stairs/steps by ramps
Roads
No
DESCRIPTION
COS
RECOVERY
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HEADING
Maintenance of roofs including necessary access
works Yes 35
Resurfacing/replacing/re-slating existing roof Yes 35
Re-felting of flat roofs Yes 35
Altering existing pitch - that is, replacing flat roof by
pitch No
Roofing over previous open space No
Installation of canopy No
Sanitary ware
COS
DESCRIPTION RECOVERY
HEADING
Repair of existing washbasins and sanitary ware Yes 35
Fitting new washbasins and sanitary ware No
Replacing existing systems in new locations or replacing
No bath by shower, toilet by wash basin, and so on
Replacement of sanitary back and side panels, vanity No units,
shower cubicles
Replacement of existing washbasins and sanitary ware in
exactly the same place, - that is, toilet cistern by toilet
Yes
cistern, sink by sink, bath by bath. This would not include
replacement of sluices and hoppers (see Note)
35
Note: Exceptions to normal COS rules, where HMRC accept the concept of repair by
replacement for the listed items only.
Signs
COS
DESCRIPTION RECOVERY
HEADING
Repairs to existing signs Yes 37
Repair by replacement signs No
New signs necessary only as a result of a Trust merger
Walls
Yes 37
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DESCRIPTION
COS
RECOVERY
HEADING
Repairing existing partitions Yes 35
Restoration of damaged plaster work/brick work Yes 35
Constructing new partitions/walls, altering partition
layout No
First time fitting of partitions in new
buildings/extensions No
Painting new walls/partitions No
Repairing damaged tiles Yes 35
Tiling new areas No
Repairs to wall-cladding Yes 35
Provision of wall-cladding/wall panels/wall protection
rails No
COS
DESCRIPTION RECOVERY
HEADING
Replacement wall-cladding/wall panels/wall protection No
rails
Windows
COS
DESCRIPTION RECOVERY
HEADING
Window cleaning Yes 35
Repairing existing window frames and glass with
similar items Yes 35
Bricking up windows or forming new window/window
frames No
Installation of fitted blinds, curtains and curtain tracks No
Replacement of fitted blinds, curtains and curtain
tracks No
Installation of combination window/blind units No
Repair to fitted blinds, curtains and curtain tracks Yes 37
Replacement of windows within same aperture (see Yes 35
Note)
Note: Exceptions to normal COS rules, where HMRC accept the concept of repair by
replacement for the listed items only.
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Woodwork
DESCRIPTION RECOVERY COS HEADING
Repairs to dado / picture rail and skirting boards Yes 35 Replacement of
dado / picture rail and skirting boards No
X-rays
DESCRIPTION RECOVERY COS HEADING
Replacement of an X-ray tube or CT Tube (see Note) Yes 37
Note: Exceptions to normal COS rules, where HMRC accept the concept of repair by
replacement for the listed items only
Annex B – Version History Version number Publication date Comments
1 15/02/2016 Contains HMRC website content VATGPB9700 extant at this date and unpublished October 2015 guidance for: • The Headings missing from the online
guidance: 14, 25, 26, 31, 35, 37, 41, 44, 45, 49, 52, 53, 54, 55, 56, 57, 61, 69 and Annex A concerning Headings 35 and 37
• Two Headings present in the online guidance*: 60 and 74
*The unpublished guidance for 60 is the
same as the published except for the
addition of the lone worker bullet point
under “Includes”. The unpublished guidance for 74 is shorter
than the published because it drops all
references to the 2013 withdrawal of the
exemption of research between eligible
bodies, which is no longer relevant
2 19/12/2016 Contains HMRC website content
VATGPB9700 extant at this date
3 03/07/2017 Contains HMRC website content
VATGPB9700 extant at this date
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