Many would say I should know the answer to this question, but I believe there are two potential answers and I looking for any real life examples as well as personal viewpoints.
I have a private hospital which is not registered for VAT as it only makes exempt supplies. It has surplus capacity in its operating theatre and recovery ward and it is prepared to lease/rent out to either the NHS or Doctors/Surgeons the operating theatre and if required the recovery ward where the patient maybe a day or overnight case. The theatre and ward comes fully equipped and my client can, if required, provide nursing staff. The NHS and/or Doctor/Surgeon has sole use of the theatre and any equipment they may need.
There is no doubt that this does not fall within the medical exemption but is this a right over land (exempt) or the use of specialised medical equipment (taxable)?
Your views and and real life examples will be appreciated.
Replies (8)
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Disclaimer: No direct experience.
My view is that it is the use of specialised medical equipment.
The room would be redundant if it was not for the specialist equipment residing in it.
Agreed
So many examples these days of HMRC trying to argue that land related supplies are taxable because what is being offered is something more, I would argue the hire of the facility is standard rated, no Option to tax needed.
HMRC are funny buggers though - have a case at present related to poultry sheds (yes...Norfolk...) where HMRc are arguing a fully specialised facility including equipment is exempt and needs an option to tax.
I'm not saying you're wrong in saying the inclusion of staff does not matter, but there surely has to be an argument that a medical service is being supplied then, a patient being the obvious beneficiary, and treatment or prevention of disease etc has to be involved? Many outsourced medical services, like triage services are, I understood, accepted to be exempt, even if the NHS or CCG is the customer.
Would be interested in any thoughts on this.
Wayne
I'd be on the taxable side as well.
It looks like more than just a right over land, I doubt the licence would really give the occupier the right to use the operating theatre as though they were fully in possesion of it, it seems more a licence to use the equipment and facilities (sterile environment etc.) and so would be taxable. As Chappy more or less said; what's the chance someone would be looking to use the room if it didn't have the equipment in it? And if they wouldn't want it without the equipment then the major element they're looking to use would be that equipment.
The supplies of staff might be exempt medical or could be taxable supplies of staff depending on who ultimately controls and directs the staff during the time they're in use, and you'd have to consider whether it's a single or multiple supply and so whether it's divisible for VAT purposes from the use of the theatre/ward. See the 'Rapid Sequence' decision: http://www.bailii.org/uk/cases/UKFTT/TC/2013/TC02826.html, as referenced in this thread: https://www.accountingweb.co.uk/anyanswers/question/vat-supply-staff-or-supply-speech-therapy for some of the considerations relating to this.
Control
It looks like more than just a right over land, I doubt the licence would really give the occupier the right to use the operating theatre as though they were fully in possesion of it, it seems more a licence to use the equipment and facilities (sterile environment etc.) and so would be taxable. As Chappy more or less said; what's the chance someone would be looking to use the room if it didn't have the equipment in it? And if they wouldn't want it without the equipment then the major element they're looking to use would be that equipment.
The supplies of staff might be exempt medical or could be taxable supplies of staff depending on who ultimately controls and directs the staff during the time they're in use, and you'd have to consider whether it's a single or multiple supply and so whether it's divisible for VAT purposes from the use of the theatre/ward. See the 'Rapid Sequence' decision: http://www.bailii.org/uk/cases/UKFTT/TC/2013/TC02826.html, as referenced in this thread: https://www.accountingweb.co.uk/anyanswers/question/vat-supply-staff-or-supply-speech-therapy for some of the considerations relating to this.
Agreed, though, in my view, Rapid Sequence is wrong. First Tier too. More on this in the thread you quoted
I agree with spidersong
This is a supply of facilities, not merely a right over land, and of staff to provide medical care, rather than a direct supply of medical care.