Tax court ruling clarifies VAT charges

A private baby scan clinic’s successful appeal against the taxman’s demands to charge VAT has brought some advice to doctor entrepreneurs from a specialist medical accountant.

Vanessa Sanders, a partner with Stanbridge Associates, said: ‘It would appear that it is imperative that any services being claimed as exempt from VAT should adhere to the strict rules surrounding medical care, including using medically licensed and registered professionals with appropriate professional indemnity in place. 

‘It would also be pertinent to consider the marketing of any business model to ensure the raison d’être is aligned with the actual practice.’ 

In a recent case in the tax tribunals, a decision was reached which gives hope to those who wonder about whether or not their services can remain exempt from VAT.