Who supplies the services?

The taxpayer was set up by two partners of a dental practice (CPD) to provide dental services to an NHS trust. However due to a contractual issue the services were supplied to the trust through CDP with the taxpayer acting as a subcontractor for CPD.

HMRC treated the company’s supplies to CPD as taxable and registered it for VAT from August 2010 on the basis that there was a standard-rated supply of staff.

The taxpayer argued that HMRC’s view was flawed because the dentists were not controlled by CDP. They were providing medical services through the company and nothing in the EU VAT Directive indicated a supply of medical care was exempt only if provided directly to a patient.

The First-tier Tribunal said although there was an “intervening entity” between the taxpayer that provided the dental services and the recipient NHS trust...