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HMRC internal manual

VAT Health

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HM Revenue & Customs
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The services of the medical and paramedical professions: Services which qualify for exemption

Services provided by the registered health professionals listed in Items 1 - 3 of Group 7 to Schedule 9 qualify for exemption only when both of the following conditions are met:

  • The services are within the profession in which the person is registered to practise, and use the knowledge, skills, judgement and experience acquired in the course of his professional training; and
  • The primary purpose of the services is the protection, maintenance or restoration of health of the individual concerned.

Following from the first bullet point above, these professionals cannot gain exemption if they supply services for which they have not been trained. For example, a dentist could not exempt his supplies of nursing and an optician could not exempt supplies of surgery. However, medical practitioners are entitled to exempt supplies of these services where they consider it necessary to perform them in the absence of a specialist in that field - for example in an emergency.

The case of “Dr Anthony Raymond Evans” (VTD 285) supports our view that exemption applies only to the services for which a medical professional is registered. Dr Evans was a registered nurse and a doctor of acupuncture who ran an acupuncture clinic. He argued for a strict interpretation of the law, claiming that his supplies were exempt firstly because he was on the nurse’s register and secondly, because acupuncture was within the scope of the work of a registered nurse. We argued that his request for a strict interpretation of the law would lead to an absurdity as all supplies made by a nurse would fall within the exemption; instead, only those services made by a nurse in their registered capacity could and should fall within the exemption. The Tribunal agreed with our view and in summing up advised that:

“ … item 1 must be construed to be limited to services supplied both by the persons therein set out and in the course of their professions vocations or businesses as such.”

Although the case predates the principal VAT Directive, it is still considered authority.

Under the second bullet point above, there are a number of services where we accept that the primary purpose is that of protecting, maintaining or restoring a person’s health and are therefore exempt. Equally, there are some services which will always be taxable, as their primary purpose is only ever to enable a third party to make a decision or they are administrative in nature and contain no element of diagnosis, care or treatment. However, some services may be exempt or taxable depending on their principal purpose, and some may continue to qualify for exemption regardless of purpose under other exemptions.

Section 4 of PN 701/57 Health professionals and pharmaceutical products and the remainder of this Section gives guidance on the liability of a number of supplies. These reflect discussions with representative bodies including the BMA and BDA as to the principal purpose of the supply in question. However, officers should bear in mind that the subjective nature of the purposive test laid down by the ECJ in the case of d’Ambrumenil means that there may be instances where the liability as stipulated is not appropriate, because the principal purpose is different in the particular circumstances of the case. Whilst we expect such cases to be rare, each case will ultimately have to be considered on its individual merits.