In Rapid Sequence Ltd v HMRC (TC02826 – 22 August) a company (R) supplied medical doctors to hospitals on a locum basis. HMRC issued a ruling that it was required to account for tax on its supplies. R appealed contending that its supplies should be treated as exempt under VATA 1994 Sch 9 Group 7 item 5. The FTT rejected this contention and dismissed the appeal. Judge Herrington held that although R’s supplies appeared to fall within the wording of Item 5 that provision had to be interpreted in accordance with article 132(1)(c) of Directive 206/112/EC and that R’s services did not amount to ‘medical care’ within article 132(1)(c). Item 5 had to be given ‘a conforming construction so that it is consistent with the UK’s obligation not to grant an exemption which goes beyond the permitted scope of the exemption in article 132(1)(c)’. Therefore ...
