HM Revenue & Customs (HMRC) clarifies VAT position for rehabilitation providers

05 April 2007

Health & Case Management Ltd (HCML) are pleased that HM Revenue & Customs has clarified the position regarding rehabilitation case management companies charging VAT on their services. The leading UK rehabilitation case management company believes its influential lobbying supported the changes being implemented.

HM Revenue & Customs has agreed that the principal purpose of most rehabilitation services is to improve both the physical and psychological health of the individual. The services are therefore exempt from VAT within given guidelines.

Assessment Reports commissioned for the purpose of determining what is required to assist
rehabilitation and recovery are also exempt.

This ruling is to be approved by a change in the legislation to take effect from 1 May 2007.
Helen Merfield, Chief Executive of HCML, welcomed the clarification. She said:

"Until now professional advice on whether or not rehabilitation case managers should charge VAT has been inconsistent. This has caused unnecessary confusion amongst both rehabilitation case management providers who applied VAT in good faith and clients who had to navigate an unlevel playing field.”

Helen added:

"Over the last year, HCML has lobbied HM Revenue & Customs to achieve clarification regarding the tax treatment for all rehabilitation case management providers and we welcome their decision.”

"It can only benefit the insurance industry as a whole that there is now clarification and consistency for all rehabilitation case management companies. I believe HCML played a significant part in helping to highlight the issue and progress the ruling."

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