In DPAS Ltd v HMRC [2013] UKFTT 676 (TC), DPAS Ltd administered dental treatment payment plans but found that it was liable to charge VAT on its services following the decision in AXA. To avoid charging VAT, DPAS restructured its contracts with its clients who were dentists so that its payment services were provided to the patients themselves. The First-tier Tribunal decided that the supplies fell within the finance exemption in article 135. The decision is of wider significance, as the tribunal affirmed that a taxpayer can structure (or vary) his operations, with the sole motive of avoiding VAT, without the arrangements being considered abusive, provided that the arrangements are valid from a contract law perspective and accord with economic and commercial reality.
