In RPS Health in Business Limited, RPS Consulting Services Limited T/A RPS Business Healthcare v HMRC [2020] TC 07643, the First Tier Tribunal (FTT) held that occupational health services were exempt from VAT as supplies of medical care, not standard-rated as supplies of advice to employers.
The RPS Group (RPS) provide a wide range of occupational health services, such as medicals, health surveillance, vaccinations, sickness absence management, training courses and drug/alcohol testing.
- RPS sometimes provides clients with an occupational health practitioner, such as a doctor or nurse, who delivers a range of services for a fixed price from an onsite or mobile clinic.
- RPS also provides some clients with specific services on a bespoke basis.
HMRC decided that services provided by RPS were exempt from VAT because they fell within the 'medical exemption'.
RPS appealed on the basis that they were making standard-rated supplies of information and advice to employers.
The FTT largely dismissed the appeal and held:
- Where RPS provides an occupational health practitioner to deliver a range of services for a fixed price from an onsite or mobile clinic, this is a single indivisible economic supply of exempt services, being made up of elements which are so closely linked that it would be artificial to split them
- Otherwise, RPS provides separate single supplies on a bespoke basis. The overwhelming majority of these supplies are exempt, with ill-health retirement medicals, medico-legal services, administration charges and training courses being standard rated.
The FTT therefore substantially agreed with HMRC on the classification of almost all the services as exempt, except ill-health retirement medicals, medico-legal services, administration charges and training courses which were classified as standard rated.
Links
Health and welfare: VAT
Reduced rating, zero-rating and VAT exemption can apply to various services relating to medical care, health and welfare.
Partial exemption & input VAT
How do you calculate the amount of input tax you can recover under the VAT partial exemption rules? What are the de minimis rules?
External links
RPS Health in Business Limited, RPS Consulting Services Limited) v HMRC [2020] TC 07643