Dental plan provided VAT-exempt ‘payment services’ to patients, Tribunal finds

A dental payment plan provided to patients amounts to a ‘service for a consideration’ for VAT purposes, but also falls within the payment services exemption under the VAT Directive, the First-Tier Tax Tribunal has ruled.

The provider, DPAS Ltd, had purposively restructured its contractual arrangements with patients following a 2010 decision by the Court of Justice of the European Union (CJEU). The CJEU had found that Axa UK, which operated a similar service called Denplan, was liable for VAT at the standard rate because its plans were operated on behalf of dentists. Structured in this way, Denplan’s services were essentially those of ‘debt collection’ and specifically excluded from the exemption.

Following HMRC’s announcement that the Axa decision would take effect from 1 January 2012, DPAS Ltd consulted with professional VAT advisers and changed the structure of its contracts with dentists and patients. The effect of these changes was that although it continued to make supplies of dental payment plans to dentists, which were subject to VAT; it also made some supplies directly to patients.

Continue reading Dental plan provided VAT-exempt 'payment services' to patients, Tribunal finds.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s