Revenue

Value added tax - zero rated items - accessory for using with medical equipment - use determined according to consumer's intended purposeRoyal Midland Counties Home for Disabled People v Commissioners of Customs and Excise: ChD (Neuberger J): 20 June 2001The taxpayer charity was engaged in running a nursing home for the severely physically disabled.

As the majority of its patients were dependent on electrically powered medical equipment, the charity decided that some precaution had to be taken against the possibility of a power failure and it therefore installed an emergency generator at a cost of 24,237.50.The VAT and Duties Tribunal held that the generator was not an accessory for use with medical equipment for the purposes of note 3(c) of group 15 of schedule 8 to the Value Added Tax Act 1994 and therefore did not qualify for zero rating.

The charity appealed.Hugh McKay (instructed by Blythe Liggins, Leamington Spa) for the appellant.

Rebecca Haynes (instructed by the Solicitor, Customs and Excise) for the commissioners.Held, allowing the appeal, that whether an item was an accessory for note 3(c) was to be determined by reference to the purpose for which the consumer intended to put the item; that provided an item was used in connection with medical equipment the fact that it could also be used in connection with other equipment did not prevent it falling within the ambit of the note; that an item could still be an 'accessory' notwithstanding that it was regarded as necessary or essential by the consumer, and; that on the evidence, the generator was within note 3(c).