Commentary

V4.146 Exemption for health and welfare—overview of the legislation

Part V4 Exemption, zero-rating and reduced rates

V4.146 Exemption for health and welfare—overview of the legislation

Health and welfare

V4.146 Exemption for health and welfare—overview of the legislation

UK legislation—exemption for health and welfare

The exemption extended to certain medical services is conferred by VATA 1994, Sch 9, Group 7. For HMRC's practice in this connection, see Notices 701/31 'Health Institutions' (August 2014) and 701/57 'Health professionals and pharmaceutical products' (February 2021).

Certain goods and services provided in respect of healthcare, etc, are zero-rated1. It should also be borne in mind that much of the health care provided in the UK by the National Health Service is a non-business activity and therefore is outside the scope of VAT. VAT on certain costs may nevertheless be recovered under the provisions described in V5.161 and V6.266–V6.266B.

Archived EU legislation—exemption for health and welfare

The exemption extended to certain medical and welfare services in UK law was derived from what is now Archived Directive 2006/112/EC, arts 132(1)(b)–(e), (g) and (h) (ie the Directive as it stood at IP completion day). Following the UK's departure from the European Union and the end of the implementation period, it is broadly no longer bound by the provisions of the Archived Directive. For the time being however, the wording of UK law remains unaltered and, accordingly, should be interpreted in light of its derivation from EU law. There have been many cases before the Court of Justice that have sought to clarify the meaning of the Archived articles. For the foreseeable future, it is likely that the UK courts will adopt this historic interpretation

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