Zero rating or exemption for ambulance services

Jigsaw provided ambulance services. These are usually exempt under VATA 1994 Sch 9 group 7 item 11 as ‘the supply of transport services for sick or injured persons in vehicles specially designed for that purpose’. However some of its services were zero rated under Sch 8 group 8 item 4 and note 4D. When services were exempt and zero rated the zero rate took precedence under s 30(1). The benefit to the taxpayer was that it could then claim input tax on supplies made to it.

HMRC told the taxpayer its services were exempt not zero rated.

The taxpayer appealed.

The First-tier Tribunal found in favour of the taxpayer; HMRC appealed.

The Upper Tribunal said the starting point for determining zero rating was item 4(a) which had to be read with note 4D.

Looking first at item 4(a) the question was whether the vehicles...