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HMRC internal manual

VAT Health

Dentists: Supplies between dentists

Although a dental practice may appear to be one business, it is often comprised of a number of dentists operating independently in the same premises and as a result, charges may be generated from one dentist to another.

There are a number of possible arrangements under which dentists may cooperate in a practice. The BDA issue model agreements and a summary of the key ones is given in the following sub-section. However, some dentists may choose not to follow the BDA agreements, and set up their own arrangements. In these cases, liability should be determined using the following principles:

Following discussions with the BDA, it has been agreed that the supplies of services (use of facilities, equipment and staff etc) and dental prostheses, by a dentist for the purpose of enabling the practitioner receiving the supplies to carry out dentistry are exempt, subject to the following limitations:

  • supplies of goods for sale (other than dental prostheses) - for example, toothpaste, toothbrushes - by one dentist to another are taxable supplies. Supplies of parts and consumables for dental equipment which is used by the associate but owned by the practice are included in the principal’s exempt supply of facilities, but the sale of dental equipment by a practice owner to an associate (or anyone else) is a taxable supply;
  • exemption will apply only to supplies which allow the associate to perform dentistry - for example, the supply of staff only will not be covered by the exemption under item 2; and
  • supplies made by a dentist who has ceased to practice are not covered by the exemption - although supplies made by practice owners who do not practice dentistry in their own practice(s) are covered by the exemption as long as they practice elsewhere - for example, in dental hospitals etc.

In our discussions with the BDA we have emphasised that we must restrict the exemption to supplies which are predominantly medical in nature, because we are constrained by EU law which refers to “the provision of medical care in the exercise of the medical and paramedical professions…” This is why we have insisted that the dentist wishing to take advantage of the exemption must be a practising one. Where a dentist is not practising but supplies facilities to other dentists, then our view is that he is acting solely as a landlord and not as a dentist and as such exemption is not applicable.