VAT Tribunal decisions highlights tax challenges facing specialist healthcare providers

Hillier Hopkins LLP

Chartered Accountants & Tax Advisers

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The Court of Appeal has delivered a judgment against specialist healthcare business LIFE Services and The Learning Centre (Romford) that highlights the VAT challenges facing private healthcare providers which are not regulated by the Care Quality Commission (CQC) or who do not have a charitable status.

The decision concerns the treatment of VAT on the provision of day care services to vulnerable adults by private companies yet, equally applies to businesses providing Covid PCR tests, blood tests, and nursing and care homes where day care is provided.

The Court of Appeal was asked to determine the liability of VAT on healthcare services provided by private companies. The Court of Appeal upheld HMRC’s position that VAT is only exempt where providers are charities, public bodies or regulated by a relevant body, such as the CQC.

Ruth Corkin, our VAT and Indirect Tax Principal said: “In this case, LIFE and The Learning Centre provided care plans agreed and funded by a local authority. The provision of that care was monitoring and inspected by the local authority, and not the CQC.

“LIFE and The Learning Centre argued that the services where exempt from VAT and HMRC disagreed. The Court of Appeal agrees with HMRC.”

The Court of Appeal said in its decision that what “is required is that the institution or agency is ‘approved, licensed, registered or exempted from registration in respect of the supply of welfare services by any Minister or other authority.”

“Membership of a professional or trade body does not meet this requirement,” says Ruth Corkin.

Day care services open to everyone and laboratory testing facilities providing tests for businesses are not required to be regulated under law and cannot, therefore, register with the CQC. In Scotland, however, day care services are regulated under the devolved government, making VAT treatment that much more complex.

Ruth adds: “VAT is complex at the best of times. It becomes even more so when there is the provision of specialist care. Specialist care providers should seek the support and advice from an accountant that has a deep understanding of the sector and issues at hand.”

VAT is a complex area. If you have been affected by any of the topics mentioned please get in contact with one of our friendly experts who will be happy to assist you. You can contact us on +44(0)330 024 3200 or

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Ruth Corkin - Prinicipal - VAT and Indirect Tax Advisory at Hillier Hopkins

Ruth has been involved with VAT for over 30 years. She started her VAT career as a Customs and Excise Officer in Essex and then moved into consultancy with a variety of well-known accountancy firms. She is well known in the VAT world and is the proud author of many articles and technical works.

Contact Ruth at or on +44 (0)1908 713860

Based at the following office - Milton Keynes, Watford and London