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Occupational Health services

27th May 2020
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One of the later pre-lockdown FTT decisions concerned a major commercial provider of Occupational Health services. They had standard rated their services to corporate clients, apparently following advice from HMRC back in 2006.

It is not clear what triggered HMRC to revise their view, but I suspect the sums of money are substantial. HMRC’s decision affected supplies made from 1 October 2017. (Presumably supplies prior to that date were covered by the misdirection provisions.)

On the substantive issue, supplies of occupational health services are exempt under Item 1 to exempt Group 7. That seems clear. There is no question of an ‘eligible body’ argument, as that does not affect supplies under the ‘Health’ category.

Paragraphs 1-12 of the decision provide a helpful summary. There are a further 437, so you may not wish to read it all!

The original disagreement assumed that all the supplies in question (around 20 were considered; see para 381) were single indivisible supplies. But the further question of single or multiple supplies was also addressed, which contributes to the length of the decision.

The Tribunal’s task was made more complex by witnesses whom the Tribunal found to be “partisan” and “not entirely reliable.” (See paras 28 and 31.)

And, not only had the Appellant company changed its position twice shortly before the Hearings, but the Tribunal found reason to criticise Counsel for both parties, although I think this was mainly due to their respective parties changing their positions:

393.     As is clear from our summary of the parties’ submissions, both Counsel repeatedly changed the parameters of what they said constituted the predominant element(s) of the single supply.

397.     Neither Counsel was able to put a coherent and consistent case for RPS making a single supply because it was not possible to fit the facts to that submission.  In coming to that conclusion, we mean no disrespect: both Counsel were doing their best to put their client’s cases.  

As seemed obvious from the start, the Tribunal held that supplies of Occupational Health services are exempt from VAT. Some associated services which do not protect and improve the health of recipients were held to be taxable.

The full decision is here for your careful reading: www.bailii.org/uk/cases/UKFTT/TC/2020/TC07643.html

 

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