In RPS Health in Business Limited, RPS Consulting Services Limited T/A RPS Business Healthcare v HMRC  TC 07643, the First Tier Tribunal (FTT) held that occupational health services were exempt from VAT as supplies of medical care, not standard-rated as supplies of advice to employers.
The RPS Group (RPS) provide a wide range of occupational health services, such as medicals, health surveillance, vaccinations, sickness absence management, training courses and drug/alcohol testing.
- RPS sometimes provides clients with an occupational health practitioner, such as a doctor or nurse, who delivers a range of services for a fixed price from an onsite or mobile clinic.
- RPS also provides some clients with specific services on a bespoke basis.
HMRC decided that services provided by RPS were exempt from VAT because they fell within the 'medical exemption'.
RPS appealed on the basis that they were making standard-rated supplies of information and advice to employers.
The FTT largely dismissed the appeal and held:
- Where RPS provides an occupational health practitioner to deliver a range of services for a fixed price from an onsite or mobile clinic, this is a single indivisible economic supply of exempt services, being made up of elements which are so closely linked that it would be artificial to split them
- Otherwise, RPS provides separate single supplies on a bespoke basis. The overwhelming majority of these supplies are exempt, with ill-health retirement medicals, medico-legal services, administration charges and training courses being standard rated.
The FTT therefore substantially agreed with HMRC on the classification of almost all the services as exempt, except ill-health retirement medicals, medico-legal services, administration charges and training courses which were classified as standard rated.
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