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List of exempt & taxable supplies for VAT

From 1st May 2007 the VAT exemption for medical services will change. Medical services intended principally to protect (including maintain or restore) the health of an individual are still exempt from VAT. Medical services that are primarily for the purpose of enabling a third party to take a decision (currently exempt from VAT) are taxable. This change will take effect from 1st May 2007.

Medical Services – Still Exempt

  1. Services provided under GMS, PMS, APMS contracts
  2. Clinical trials – exempt only if it involves patient care e.g. monitoring a patient for adverse reactions, which may be detrimental to their health.
  3. Certificates and reports where the purpose is to protect, maintain or restore the health of the individual e.g. sick notes
  4. Fitness certificates where the purpose is to protect the health of the individual e.g. provided to an employer to ensure they recognise that the individual health places limitations on certain activities.
  5. Insurance services, the following are exempt
    1. Health screening under private medical insurance policies – these are regular check ups to detect early signs of disease
    2. Income/credit protection insurance-medical services where the patient has fallen ill (as opposed to losing their job) and which are aimed at assisting the patient in returning to a normal life
    3. Motor Insurance - where services are provided under a policy to assist in enabling an injured motorist to return to full health
    4. Any other medical service provided in connection with an insurance policy where the principal aim is to assist in restoring the health of the individual.
  6. Post employment medicals where these are to ensure a person is medically well enough to undertake a proposed activity, to assess whether proposed work could adversely affect their health or to determine whether early retirement on ill grounds is appropriate.

Medical Services – NOW taxable for VAT

  1. General administration services e.g. signing passports applications, providing character references
  2. Clinical trials – services restricted to monitoring side-effects for analytical purposes or services with no patient contact
  3. Access to medical records – copies of health records which are not required under the following are taxable:-
    1. o Data Protection Act 1998
    2. o Access to Medical Reports Act 1988
    3. o Access to Health Records Act 1990
  4. Certificates and reports that enable a third party to make a decision and contain no element of therapeutic care e.g. compensation claims, benefits or registration as blind.
  5. Fitness certificates
  6. Forensic physicians, these services are exempt however if a statement or report is required at a later stage, this will be a separate supply which is taxable.
  7. Medicals and reports which are not principally to protect/restore the health of an individual.
  8. Medico-legal work
  9. Pre-employment medicals
  10. Post employment medicals which are not principally to protect the individual’s health e.g. medical undertaken to determine whether a person can join a pension scheme.
  11. Paternity tests
  12. NHS Income – Blue/orange disability badges
  13. Lecture fees, writing articles for journals
  14. Completion of forms to enable persons to obtain blue/orange disability badges