VATHLT2011 - Private Sonography Services

This paragraph explains 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 (Decision No: TC07687).

Supplies of certain health services provided outside hospitals and other institutions will be treated as making exempt supplies under Item 1 of Group 7 of Schedule 9 to the Value Added Tax Act 1994 where they meet 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 explained below.

Appropriately qualified health professionals are those 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. The services must be within the profession in which they 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.

Window to the Womb operated a franchise model for businesses which supply various packages of ultrasound scans for pregnant women. The above 2 conditions were applied by the FTT which concluded that a large majority of customer’s purchased scans had 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 accepted the 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 also demonstrate that the 2 conditions are met. In other words, the persons carrying out the scans must also be suitably qualified and registered.