Tag Archives: VAT-medical-services

VAT: Updated guidance for medical professionals

By   2 October 2023
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HMRC has updated VAT Notice 701/57 – Health professionals and pharmaceutical products.

The changes, in summary, are:

Para 2.1 – Pharmacy technicians (only in England, Scotland and Wales) has been added to the meaning of a health professional list.

Para 2.5 – Services directly supervised by a pharmacist has been removed: Services that are not exempt from VAT.

Para 4.7 has been updated to make it clear when forensic physicians services are exempt healthcare.

Para 5.2 – Services supervised by pharmacists are now included when referring to a health professional: Exemption of care services performed by a person not enrolled on a statutory medical register.

The exemptions covered in the health and welfare area are complex and even slight differences in circumstances can change the VAT liability of a supply. Additionally, there are further exemptions for charities and NFP bodies and the age-old issue of business/non-business.

We advise that specialist advice is sought when considering the VAT position of supplies in this area.

VAT: Car parking provided by a hospital – Exempt? Non-Business? Taxable?

By   20 April 2021
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Latest from the courts

In the Northumbria Healthcare NHS Foundation Trust (The Trust) First Tier (FT) case the issue was whether pay and display car park charges were subject to VAT considering the status and activities of the Trust.

Background

The Trust provided parking for staff and visitors at the 14 sites for which it was responsible. The question was whether output tax was due on the parking charges. The Trust submitted a claim for overpaid VAT considering that either:

  • there was no economic activity, or, if there was,
  • there was a “special legal regime” which meant that tax was not due because The Trust was not a taxable person, or
  • the parking charges were closely related to the Trust’s exempt activity (medical care) such that they themselves were exempt

HMRC rejected the claim on the grounds that car parking is a standard rated supply and The Trust appealed against this decision.

It was agreed that The Trust, in carrying out its statutory activities (NHS medical services) is not in business (no economic activity) and therefore the services were outside the scope of VAT. Some private medical services were also supplied, and it was common ground that these were exempt.

Decision

The court found that:

  • the Trust made supplies for a consideration for the purposes of obtaining income on a continuing basis so there was economic activity
  • the Trust did not provide car parking under a “special legal regime” as a public authority; there is no concept of special legal regime in the relevant legislation
  • the treatment of The Trust as a non-taxable person re; car parking would lead to significant distortion of competition
  • supplies of car parking were not closely related to medical care. The service must be an indispensable stage and integral in the supply of medical services, ie; the diagnosis, treatment and cure of diseases or health disorders
  • the supply of car parking was consequently a taxable business activity carried out by a taxable person, was not exempt, so output tax was properly due.

Commentary

We are aware of a number of cases stayed behind this appeal and there will be disappointment, but little surprise (I suspect) at the outcome. Car parking is a significant source of income for hospitals, medical centres and clinics etc, but this case made it clear that there is no difference in VAT terms between hospital parking and other commercial car parks.