Pay handling service not exempt

Denplan Ltd a subsidiary of AXA PPP Healthcare Group plc provided administrative and support services to dentists whereby the patient paid Denplan a fixed monthly sum in return for a specified amount of dental care.

The business acted as agent for the dentist in receiving the payments which it forwarded to the client charging a small fee for the service.

AXA claimed part of the fee was VAT-exempt under Article 13(B)(d)(3) of the Sixth Directive as implemented by VATA 1994 Sch 9 group 5.

HMRC disagreed saying the fees charged were consideration for supplies of services subject to VAT. AXA appealed.

The case was referred to the European Court of Justice (ECJ) for a preliminary ruling. It ruled that VAT was due; the matter returned to the Court of Appeal which decided the ECJ was entitled to...