EXEMPTION – Medical care – Services provided by medical practitioner – Whether exempt as being provision of medical care – Application of decision of ECJ following reference in this matter – Sixth Directive art 13A.1(c)

LONDON TRIBUNAL CENTRE

	DR PETER D’AMBRUMENIL	Appellants
DISPUTE RESOLUTION SERVICES

-	and –

	THE COMMISSIONERS OF CUSTOMS AND EXCISE	Respondents

				Tribunal:	STEPHEN OLIVER QC   (Chairman)

Sitting in public in London on 26 February 2004

Michael Conlon QC, for the Appellants 

Nicholas Paines QC, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004

DECISION

1.	The services in issue in this appeal are medico-legal services provided by Dr D’Ambrumenil and Dispute Resolutions Services Ltd (“the Appellants”).  The issue is whether they are VAT exempt or whether (as the Appellants contend) they fall outside the exemption provided by article 13A.1(c) of the Sixth Directive and are standard rated.

2.	Article 13A.1 provides, so far as is relevant, that –

“(c)	the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned;”

is to be an exempt supply.

Background

3.	The appeal is against the decision of the Commissioners given at the direction of the Tribunal.  The decision covered sixteen types of supplies.  An interim decision of the Tribunal (R K Miller CB) was released on 16 March 1999.  This allowed the appeal in respect of supplies of lectures, first-aid courses, expert reports in fatal accident cases and arbitration, mediation, negotiation and conciliation services; the consequence is that those supplies rank as standard rated supplies.  The Appellants’ paternity testing services were, by agreement, determined as standard rated following the judgment of the Court of Justice in D v W (Case C-384/98).  The Appellants’ services of assessment and verification of claims on medical or travel insurance, also the subject of the decision appealed against, have now been agreed between the parties as standard rated services.

4.	In its interim decision the Tribunal decided to stay proceedings and seek a preliminary ruling from the European Court of Justice on certain other supplies covered by the disputed decision.  On 6 June 2001 the tribunal referred to the Court a question as to whether VAT exemption under Article 13A.1(c) covered certain specified activities.  I quote from the reference:

“Is article 13A(1)(c) of Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes to be interpreted as covering the following activities when performed in the exercise of the medical profession as defined by the Member State:

(a)	conducting medical examinations of individuals for employers or insurance companies,

(b)	the taking of blood or other bodily samples to test for the presence of viruses, infections or other diseases on behalf of employers or insurers,

( c)	certification of medical fitness, for example, as to fitness to travel,

(d)	giving certificates as to a person’s medical condition for purposes such as entitlement to a War pension,

(e)	medical examinations conducted with a view to the preparation of expert Medical Reports regarding issues of liability and the quantification of damages for individuals contemplating personal injury litigation,

(f)	the preparation of Medical Reports (i) following the examinations referred to in (e) and (ii) based on medical notes but without conducting a medical examination,

(g)	medical examinations conducted with a view to the preparation of expert Medical Reports regarding professional medical negligence for individuals contemplating litigation, and

(h)	the preparation of Medical Reports (i) following the examinations referred to in (g) and (ii) based on medical notes but without conducting a medical examination?”

5.	The judgment of the Court was released on 20 November 2003.  

6.	It is accepted by the Respondent that the Appellants’ supplies falling within items (a) and (d)-(h) are, in the light of the Court’s ruling, standard rated supplies.  To that extent the matter is resolved by agreement and no further decision is required from this Tribunal (save as to costs, see below).  

7.	The case has come back to the Tribunal for a final decision on items (b) and  (c).  Paragraphs 6 and 7 of the order for reference provide facts relevant to these items as agreed between the parties.  These read:

“6.	Testing for other purposes. The taking of blood or other bodily samples to test for the presence of viruses, infections, or other diseases, including, in particular, the HIV virus. This activity is conducted on behalf of, and for the benefit of, employers or insurers and may or may not be in respect of current or former patients of Dr D’Ambrumenil.  

7.	Medical certificates.  Certification of medical fitness, for example as to fitness to travel, at the request of the individual who may or may not be a current or former patient of Dr D’Ambrumenil. It involves the use of Dr D’Ambrumenil’s medical skills and may involve a physical or mental examination.”

Conclusion

8.	The relevant part of the Court’s judgment is found in paragraphs 63-67 in Case C-307/01.  The test adopted by the Court is that of “principal purpose”. As regards medical certificates, the Court’s distinction lies between certificates provided in order to inform a decision by a third party, such as a prospective employer or insurer, which provision is taxable (paragraph 64), and certificates provided in order to make it clear whether a particular activity would be dangerous to health (or dangerous unless limitations are imposed), which provision is exempt (paragraph 65).  In paragraph 68 the Court ruled that the giving of certificates of fitness to travel is expressly held to be exempt where it is “intended principally to protect the health of the person concerned”.

9.	As regards medical examinations (referred to in paragraphs 66 and 67 of the Court’s judgment) the same distinction is applied.  If the purpose of the examination is to inform a decision on recruitment or terms of insurance, it is taxable (paragraph 66).  But checks to monitor health of workers or insured persons are exempt even if commissioned by an employer or an insurance company as the case may be (paragraph 67).

10.	Basing my conclusion on the agreed facts set out above and in the light of the decision of the Court, I determine the matter as follows:

•	Medical testing conducted for purposes other than those of prospective employers and insurers is an exempt activity where it is intended principally to enable the prevention or detection of illness or the monitoring of the health of  the person in question.

•	The provision of a certificate of medical fitness is an exempt activity where it is intended principally to protect the health of the person concerned.

11.	The ruling of the Court and the resulting decision of this Tribunal resolves the matter substantially in favour of the Appellants.  I direct that the Respondents pay the Appellants’ costs falling within rule 29(1) of the Tribunal Rules. If the amount cannot be agreed the matter shall be referred back to this Tribunal for further directions.

STEPHEN OLIVER QC
CHAIRMAN

RELEASED:

LON/97/951