Nuffield Health v HMRC

In Nuffield Health v HMRC (TC02697 – 17 May) a charity (N) which operated several private hospitals reclaimed input tax on drugs and prostheses which had been used from 1974 to 1986 in the course of treating patients at its hospitals. HMRC rejected the claim on the basis that the drugs and prostheses had been used in the course of a single composite supply of healthcare which was exempt from VAT. N appealed contending that the drugs and prostheses should be treated as separate supplies which qualified for zero-rating.

The First-tier Tribunal rejected this contention and dismissed the appeal finding that from the patient’s perspective ‘there is no meaningful separation of the supply of drugs and prostheses from elements of the care and treatment they receive’. Accordingly N was making a single supply of healthcare...