Input tax on consumable goods used in surgery

The trust had a contract with a third-party provider for the supply of healthcare facilities. The provider supplied the trust with managed surgical theatre facility services as well as a range of goods. HMRC allowed the trust a refund of VAT paid on some of these but not on single use goods such as sutures bandages gauze and prostheses. It said the trust was not entitled to a refund on the consumable goods as these did not fall within the remit of the contracted-out services direction (COSD) in their own right or as part of a single supply of healthcare facility services. 

Broadly health bodies have been encouraged to contract out services to the private sector which would have traditionally been performed in-house. In recognition that many of these services would be subject to VAT the government decided to compensate the health bodies...