In HMRC v Jigsaw Medical Services Limited [2018] UKUT 222, the Upper Tribunal (UT), overturned the First-Tier Tribunal (FTT), finding that emergency ambulance services cannot be zero-rated and were exempt.

Where services fall within both the exempt schedule and zero-rated schedule, the zero rated schedule will take precedence.

  • Jigsaw provided ambulance services.
  • Transport services for sick or injured persons in vehicles specifically designed for that purpose are exempt.
  • There were retail 'mini-bus' versions of the ambulances availble to the public.
  • The zero-rating schedule confirms the supply of passenger transport is zero-rated when the vehicle is designed or adapted to carry 10 or more passengers.
  • Notes to the schedule specfiy that this vehicle can include one designed, or substantially and permanently adapted to safely transport one or more persons in a wheelchair, and where, if not so adapted, would be capable of carrying 10 or more persons.

Jigsaw argued that the emergency ambulance services, where the vechicle is adapted for stretchers and other equipment should fall within the zero-rating provision and this takes precedence over the exemption.

  • Both Jigsaw and HMRC accepted that the patients were passengers.
  • HMRC also accepted that the vehicle could be turned into one that carries 10 or more persons. Though the retail versions on sale were 7 or 8 seaters.
  • HMRC also accepted that patient transport ambulance services could qualify for zero-rating.

The FTT, in a short decision, determined that zero-rating applied and took precedence:

  • A literal and broad interpretation should be used instead of a narrow one.
  • The vehicle can, without complete rebuilding be converted into one that can carry ten or more persons.
  • The vehicle is therefore one falling within the zero-rating provisions.

The UT overturned the FTT decision:

  • The emergency vehicle was adapted to enable safe transport of someone in a wheelchair.
  • What needs to be looked at though, is what adaptations were made to enable the safe transport of someone in a wheelchair.
  • No seats were removed to enable that transportation. Only restraints were added to what was already in place to make it safe.
  • Therefore, if the wheelchair modifications were reversed, this does not include putting in a number of extra seats, as the modifications made to enable wheelchair transport did not include taking out seats.
  • Compare this to a 12 seater car, where seats are taken out to make the wheelchair modifications, were those modifications removed, that would include putting the seats back in as that was part of the modifications.

The FTT erred in law and HMRC's appeal was allowed. The emergency ambulances did not fall within the zero-rating schedule and those services were only exempt.

External link: HMRC v Jigsaw Medical Services Limited [2018] UKUT 222


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