Further guidance required

VAT treatment of services provided by a dental payment plan

DPAS designed implemented and managed dental plans under which the private patients of dentists who were registered with it could spread the cost of treatment throughout the year. As a result of the Court of Justice of the EU (CJEU) decision in CRC v AXA UK plc (C-175/09) [2010] STC 2825 DPAS’s supplies would have been standard rated with effect from 1 January 2012 as debt collection services supplied to the dentists. DPAS therefore changed the contracts in January 2012 to create two supplies: a taxable contract with the dentist and an exempt payment handling contract with the patient.

HMRC ruled that supplies of services for the administration of dental plans from 1 January 2012 were either a single standard-rated supply of services to the dentists or a mix of standard-rated supplies of services to patients.

The First-tier Tribunal...