VAT Status – CT Scans
VAT Status – CT Scans
CTM represented a group of consultant doctors, including cardiologists and radiologists, who offered CT scanning services to patients. HMRC had raised VAT assessments on the basis that these services were standard-rated.
HMRC’s Position
HMRC’s position was that CT scans, taken in isolation, do not constitute medical care. On this basis, HMRC argued that the scanning services were standard-rated supplies and that VAT was chargeable.
CTM’s Argument
CTM argued that the consultants were not simply providing scans in isolation. The consultants provided a full diagnostic service that included:
- Clinical assessment of the patient
- The CT scan itself
- Interpretation and analysis of the scan results
- A full diagnosis
- A treatment plan as part of ongoing healthcare delivery
CTM’s case was that the supply, properly characterised, was a supply of medical care by qualified medical professionals, which is exempt from VAT.
The Outcome
HMRC withdrew the VAT assessments within 4 weeks of CTM submitting the appeal, confirming the VAT-exempt status of the scanning services.
This case demonstrates the importance of properly characterising the nature of a supply for VAT purposes and the value of expert representation in challenging HMRC’s assumptions.
Frequently asked questions
Are CT scans exempt from VAT?
In the case CTM handled, HMRC's view was that CT scans taken in isolation do not constitute medical care and are standard-rated. CTM argued that the consultants provided a full diagnostic service, amounting to a supply of medical care by qualified medical professionals, which is exempt. HMRC withdrew its assessments, confirming the VAT-exempt status of those scanning services.
Why did HMRC say the CT scanning services were standard-rated?
HMRC's position was that CT scans, taken in isolation, do not constitute medical care. On that basis it argued that the scanning services offered by a group of consultant doctors, including cardiologists and radiologists, were standard-rated supplies on which VAT was chargeable, and it raised VAT assessments accordingly.
What made the consultants' service exempt medical care?
The consultants were not simply providing scans in isolation. They provided a clinical assessment of the patient, the CT scan itself, interpretation and analysis of the results, a full diagnosis and a treatment plan as part of ongoing healthcare delivery. CTM argued that this, properly characterised, was a supply of medical care, which is exempt from VAT.
How quickly did HMRC withdraw the CT scan VAT assessments?
HMRC withdrew the VAT assessments within four weeks of CTM submitting the appeal, confirming the VAT-exempt status of the scanning services. The case shows the importance of properly characterising the nature of a supply for VAT purposes and of challenging HMRC's assumptions.
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