In Window to the Womb (Franchise) v HMRC  TC 07687, First Tier Tribunal (FTT) found that pregnancy scans were medical care and therefore exempt from VAT.
Window to the Womb provides various different types of ultrasound scan packages to pregnant women including 4-D images through its clinics and the scans were taken by qualified radiographers.
A pregnancy scan package comprises early pregnancy scans to check date pregnancies or provide general reassurance and several later pregnancy scans which included a number of medical checks, the baby’s position, and size, gender confirmation, heartbeat recordings etc.
The business treated the provision of these scans as a supply of medical care.
HRMC argued that the primary purpose of the supplies:
- Was not the protection of health but the provision of a 'bonding experience' or a 'reassurance scan' for pregnant women based on the high-quality 4-D pictures of the fetus.
- The clinics did not provide any treatment should the scan show problems with the baby, therefore the services should be standard rated for VAT at 20%.
Window to the Womb appealed to the FTT.
It was noted that a large majority of customers, some 79%, purchased scans where their principal purpose was to obtain the well-being report or information about the growth and presentation of the fetus.
The FTT’s focus then was on the remaining 21% with significant 4D imagery. The FTT judge concluded that it was likely that the remaining 21% are not purchasing scans principally for the 4D imagery and hence the judge was satisfied that supplies of all the scans were exempt as supplies of medical care.
The appeal was allowed.
Health and welfare: VAT
Reduced rating, zero-rating and VAT exemption can apply to various services relating to medical care, health and welfare.