Zero rating is available for the supply of certain substances which are to be used by a charity for engaging in research. Zero rates apply to the supply to a charity of a substance directly used for synthesis or testing in the course of medical or veterinary research. ‘Substance’ means any natural or artificial substance, whether in solid or liquid form or in the form of a gas or vapour. If the substance is purchased in the form of gas, the rating will also apply to the cylinder rental.

As with medicinal products, HMRC’s view is that research is restricted to activities which are directed towards opening up new areas of knowledge or understanding, or initial development of new techniques, rather than towards mere quantitative additions to human knowledge.

In order to qualify for the zero rating relief a charity must provide the supplier with the necessary declaration confirming that the substance will be used by the charity in the course of medical or veterinary research. Imports by charities of medicinal substances can be zero-rated provided the charity gives the supplier a certified declaration that the substance will be used by the charity in the course of medical or veterinary research. The appropriate declaration must be presented with the Customs entry form.

Like the zero rate for medicinal products this relief is restricted to charities that will be using the substances themselves; a charity which donates these items to another charity cannot obtain relief. In addition, this relief is only available to registered charities: other not-for-profit bodies, such as the NHS, cannot generally obtain relief.