- UK VAT exemptions have traditionally been applied narrowly.
- The recent removal of VAT exemption for private school education may signal potential changes to other exemptions.
- Private healthcare is a likely candidate for similar treatment, as it is often associated with wealthier individuals who could bear additional tax burdens.
- The UK’s exit from the EU allows for amendments to the VAT Act, potentially leading to changes in exemption policies.
- VAT is already applied to insurance premiums, and adding it to medical services could increase overall taxation.
- A significant portion of the UK population uses private healthcare, indicating a substantial market for potential VAT imposition.
- Disputes regarding VAT exemptions, particularly in healthcare and financial services, are expected to continue.
- The financial services sector is seeing increased scrutiny from HMRC, especially regarding VAT treatment of intermediaries and payment processors.
- Exempt services do not incur VAT, which means businesses cannot recover VAT on related costs.
- Exemptions can benefit businesses dealing with consumers or organizations that cannot reclaim VAT, as it avoids a 20% cost increase.
Source: crowe.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
