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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

1. Purpose 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 their advisers.

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 health professional.
(b) The services must be medical care which means that they must meet the primary purpose test explained in paragraph 5.

4. Appropriately qualified health professionals

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 abnormality.

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 incorrect ruling

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 professionals
  • 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
Glasgow City
G2 5EA

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.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.

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Article Published/Sorted/Amended on Scopulus 2020-10-30 20:48:46 in

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