AXA Denplan loses VAT dispute
The Court of Appeal has backed the taxman in a ruling that Axa Denplan’s payment system for a dental care scheme was ‘debt collection’ and should therefore be subject to VAT.
AXA administered a payment system for Denplan, a dental care program in which patients paid fixed fees to their dentists for an agreed level of care. AXA collected the payments from patients via direct debit and transferred the funds (less a service fee) to the dentists.The Court’s ruling (HMRC v AXA) backed HMRC's and the European Court of Justice’s (ECJ) interpretation of VAT law, in the latest development in a long-running legal dispute.
When HMRC tried to claim VAT on the services provided AXA took its case to the VAT Tribunal, which agreed there was a separate exempt supply of services that fell within the European Directive A135(1)(d) exemption covering "transactions concerning payments and transfers".
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