Court of Appeal confirms a supply of staff was not exempt from VAT
13 December 2022
- In the case of Mainpay Ltd v Revenue and Customs Commissioners [2022] EWCA Civ 1620, the Court of Appeal rejected Mainpay’s contention that their supplies are exempt from VAT and dismissed their appeal
- This was in accordance with the First-tier Tribunal (FTT) and Upper Tribunal (UT) which found Mainpay was not providing medical care and was actually making a supply of staff
- It was found that the consultants didn’t provide medical services to Mainpay, for the onward supply
- This means that Mainpay was liable to VAT at the standard rate when it supplied doctors to its agency client, who supplied them on to NHS Trusts, as opposed to being exempt from VAT under Article 132(1)(c) of the Principle VAT Directive and Group 7 of Schedule 9 to the VAT Act 1994
See our previous news item here.
See the full case here.
Aspire comment
For a contracting intermediary to be providing a fully outsourced service, whether the supply of medical care or something else, we would expect the documentation in place to support this assertion. Importantly, the reality of this arrangement should also reflect what is set out in the documentation.
Albeit relevant to the construction industry, HMRC provide a useful summary in their Domestic Reverse Charge guidance of the differences they consider relevant between a supply of temporary labour (staff) and the supply of a fully outsourced service.
Don’t hesitate to contact us if you wish to discuss this further.