asked Her Majesty's Government:What is the definition of research in relation to VAT liability (Schedule 6, Group 6, Item 2(a)) in so far as it applies to education or research of a kind provided by a school or university or charitable organisation.
Customs and Excise's interpretation of the term is set out in their VAT Leaflet 701/30/87 (Education), and is as follows:
"Research is to be understood as original investigation undertaken in order to gain knowledge and understanding. It includes the use of existing knowledge in experimental development to produce new or substantially improved materials, devices, products and processes including design and construction. It excludes routine testing and analysis of materials—e.g. for the maintenance of national standards—as distinct from the development of new analytical techniques. In the humanities it includes scholarship which leads to new or substantially improved understanding."