Axa UK have won a VAT case before the High Court over the treatment of fees
paid for dental plans.
Axa runs a plan for dentists whereby patients pay a monthly fee for their
dental services and use their dentist where necessary.
Court has ruled that the fees received by Axa for the plan should be treated
as VAT-exempt, since they are related to financial services rather than to the
supply of dentistry.
The taxman argued that Denplan’s purpose was to ‘provide a seamless
administration service’ to design dental products and market them.
The judge rejected that argument, saying that ‘the most important service
offered by Denplan is the provision and operation of payment plans, which is a
service of an essentially financial nature.’
Financial services are exempt from VAT, whereas dental work is not.
Denplan charges the dentist a fee amounting on average to 71p for each
A tribunal had earlier insisted that the payments should be split into
financial services portions and other suppplies, a view upheld by the High Court
after Axa had cross-appealed that point.
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