Revenue and Customs Brief 17 (2020) VAT liability of private sonography services Tribunal Decision
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Revenue and Customs Brief 17 (2020): VAT liability of private
sonography services – First-tier Tribunal Decision
Published 30 October 2020
of this brief
This brief clarifies HMRC’s policy concerning the VAT
treatment of ultrasound scanning services for pregnant women (baby
scanning) following the First-tier tribunal’s (FTT) decision in Window to the
Womb (Franchise) Ltd and others versus HMRC (Decision No: TC07687).
This brief clarifies how other businesses providing similar supplies
will be treated. It also invites anyone who considers that they have
received an incorrect ruling prior to that decision to seek a corrected
ruling and a refund of any tax incorrectly overpaid.
2. Who should read this
Organisations that make supplies of private sonography services and
3. VAT liability background
Supplies of certain health services provided outside hospitals and
other institutions are exempt from VAT under Item 1 of Group 7 of
Schedule 9 to the Value Added Tax Act 1994. This exemption is subject
to the following 2 conditions:
(a) The services must be provided by an appropriately qualified
(b) The services must be medical care which means that they must meet
the primary purpose test explained in
4. Appropriately qualified health
These are listed in paragraph 2.1 of Health
professionals and pharmaceutical products
(VAT Notice 701/57), where (and only where) those listed have
enrolled or registered on the appropriate statutory register.
5. Definition of medical care for the
purposes of VAT
The services must be within the profession in which you are
registered to practice.
The primary purpose of the services must also be the protection,
maintenance or restoration of the health of the person concerned. This
is set out in paragraph 2.3 of Health
professionals and pharmaceutical products
(VAT Notice 701/57) which goes on to explain that:
“For the purposes of VAT, medical services (including medical
care and treatment) are restricted only to services which fulfil
condition 2. This includes the diagnosis of illnesses, the provision of
analyses of scans or samples and helping a health professional,
hospital or similar institution to make a diagnosis.”
Condition 2 is the primary purpose test which must always be
satisfied to qualify for exemption. This test is derived from the
d’Ambrumenil case (Case C-307/01) and the FTT referred to it extensively in
its decision in Window to the Womb.
6. The FTT’s
decision and HMRC’s revised policy
Window to the Womb operates a franchise model for businesses which
supply various packages of ultrasound scans for pregnant women. The
other parties to the appeal were the franchisees themselves. The 2
conditions that have been explained were applied by the FTT which concluded that a large
majority of customer’s purchased scans with the primary purpose
of obtaining a well-being report or information about the growth and
presentation of the foetus. The remaining customers purchased both the
well-being report and 4D imagery.
The FTT concluded that
the customers primary purpose in purchasing the scans was also to
monitor the pregnancy and, if necessary, receive a diagnosis of any
For the customers of Window to the Womb the primary purpose test was
found to be met.
HMRC has accepted the FTT’s
decision in the case, which was based on the correct tests being
applied to the facts found. Other providers supplying services can
similarly exempt their supplies where the facts demonstrate that the 2
conditions are met. In other words, the persons carrying out the scans
must also be suitably qualified and registered.
7. Procedure for seeking correction of an
Requests will be considered provided they are properly evidenced.
After an initial review HMRC reserves the right to ask for more
information to ensure that the two conditions are fully satisfied
You will need to give the following evidence:
- that the services were performed by appropriately qualified
- where services are provided by others, evidence that they were
under the direct supervision of professionals and
- that the primary purpose test was met
If you have a current appeal before the FTT, you will need to give any
Tribunal reference numbers.
If you want to seek a written ruling, write to:
HM Revenue and Customs – VAT Written Enquiries
123 St Vincent Street
You will need to quote reference RCB 17 (2020).
Any business that has accounted for too much VAT may correct this by
following the normal error correction procedure. How to correct VAT errors and make adjustments or
claims (VAT Notice 700/45) explains this.
Such adjustments are subject to the 4-year cap – which starts
from the accounting period in which the error was made.
8. More information
You can find out more information in:
VAT Health Manual.
If you have any questions about these changes you can contact VAT: general enquiries for more advice.
About the Author
© Crown Copyright 2020.
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for educational / informational purposes only. Article reproduced by
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