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HMRC internal manual

VAT Health

Have goods been supplied in connection with care or medical or surgical treatment? Charges to relatives

The charge made to a relative for accommodation and meals when staying with a sick child can be exempt under Item 4.

In “Nuffield Nursing Home Trust” (VTD 3327) the Tribunal considered that the presence of the mother helped the child’s recovery and that in substance and reality the hospital provided “care for the child in the form of hospital accommodation and the nursing and ancillary services which are necessary for the proper care of the child”, including the provision of accommodation and catering to the mother “in order that she may play her part in caring for the child and helping it to recover”. The supply to the parent was seen as a “necessary ingredient of the supply of care by the hospital for the child” and was therefore exempt.

We do not accept that the exemption applies to any circumstance other than that outlined in this Tribunal. Exemption will not therefore be applicable to charges made to carers accompanying children or adults in respite or to relatives of adults staying in hospital. The “Ygeia” ECJ decision referred to at VATHLT3060 supports this policy. In part, this litigation concerned the supply of beds and meals by hospitals to persons accompanying in-patients. The Court concluded these supplies were not activities closely related to hospital and medical care unless they were essential to achieve the therapeutic objectives of the patient’s care.