Weekly VAT News

Get a Drip Limited: Whether supplies of vitamin drips and injections are medical care – FTT

In 2017, Get a Drip Limited (GAD) registered for VAT on the basis that its supplies of intravenous vitamin drips and injectable booster shots were zero rated as supplies of medical goods. Following discussions and an independent review, HMRC concluded that the supplies were standard rated. By then, GAD considered that the supplies were actually VAT exempt as supplies of medical care provided by registered medical practitioners or qualified nurses, and appealed HMRC’s decision. The First-tier Tribunal has held that the supplies constituted the provision of medical care, and were accordingly exempt. Although GAD’s website advertised specific treatments, the particular treatment provided to a customer will be based on an assessment by a doctor or a nurse. Accordingly, the supplies were made by suitably qualified medical professionals. Therefore, the issue to be considered by the FTT was whether the supplies constituted the provision of medical care. HMRC considered that GAD’s supplies did not have the requisite purpose to constitute medical care, in particular, there was no “diagnosis, treatment or cure”, and no evidence that customers suffered from a disease or health disorder. However, the FTT agreed with GAD that the supplies were provided for a therapeutic purpose, involving the diagnosis and treatment of health disorders. The FTT determined that its decision must be based on an assessment of the representative product samples provided, regardless of the fact that GAD’s position on the nature of its supplies had been somewhat inconsistent. The role of expert evidence in the decision further complicated matters: HMRC withdrew the evidence of its medical expert, and raised concerns about the written evidence of GAD’s medical expert, although the FTT concluded that the expert’s oral evidence addressed HMRC’s concerns. The FTT allowed GAD’s appeal. (Contact: Phil Simmons)

NHS Ayrshire & Arran Health Board: Zero rating of construction costs – FTT

In 2020, NHS Ayrshire & Arran Health Board sought a non-statutory clearance to treat the construction services and building materials for a National Secure Adolescent Inpatient Service (NSAIS) building as zero rated for VAT purposes. HMRC disagreed and refused the clearance, and the Health Board appealed to the First-tier Tribunal. The dispute before the FTT was in relation to the Bedroom Wing of the building. Zero-rating could apply if the Bedroom Wing was a distinct and separate part of the building designed or intended to be used solely for a relevant residential purpose (RRP). The FTT has held that the building did not meet the definition of RRP. The Health Board considered that the Bedroom Wing was home for the NSAIS patients who resided there, at least for the period of residence, and that accordingly was for a RRP. However, the definition of RRP excludes hospitals or similar institutions, and the FTT agreed with HMRC that the NSAIS building complex was a hospital: medical treatment, including therapeutic activities and medication, was delivered throughout the building, including in the Bedroom Wing. The Bedroom Wing was an “integral and inextricable part” of the NSAIS building. Accordingly, no part of the NSAIS building was designed or intended for use solely for a RRP, and zero rating could not be applied to the construction costs. The Health Board’s appeal was dismissed. (Contact: Ben Tennant)

Submission of final VAT returns – Regulations

The Value Added Tax (Amendment) Regulations 2025, with an accompanying tax and information note, have amended the  Value Added Tax Regulations 1995 (the VAT Regulations) to provide HMRC with the power to extend the time in which a business can submit its final VAT return. Under regulation 25(4) of the VAT Regulations, a business that ceases to be liable or entitled to be VAT registered must submit its final VAT return within a month of the date the cancellation takes effect, with an additional week for electronic returns. Payment is due on the last day on which the return is due. In practice, HMRC processing can delay the issue of the final return, meaning that the business is not able to meet the submission and payment deadlines, and would potentially incur penalties and interest. Accordingly, HMRC has extended the time limit by administrative concession. These regulations provide a regulatory basis for this extension, with a new regulation 25(4AA). The regulations will come into force on 13 June 2025. (Contact: Andrew Clarke)

CJEU VAT case calendar

On 22 May, there will be an Advocate General opinion released in Brose Prievidza on a cross-border EU VAT claim for tooling.