FTT Denies NHS Ayrshire & Arran’s Appeal for Zero-Rating Construction Costs on VAT Grounds

• The FTT dismissed NHS Ayrshire & Arran Health Board’s appeal on VAT treatment for construction costs.
• The appeal focused on zero-rating VAT for the Bedroom Wing of a National Secure Adolescent Inpatient Service facility.
• Zero-rating required the Bedroom Wing to be a distinct part designed solely for a relevant residential purpose.
• The Health Board claimed the Bedroom Wing served as a home for patients, meeting the residential purpose criteria.
• The FTT agreed with HMRC, stating the facility functioned as a hospital, excluding it from zero-rating.
• The Bedroom Wing was deemed an integral part of the hospital, not a separate residential entity.
• The ruling clarifies VAT treatment for healthcare facility construction, distinguishing residential from medical purposes.

Source: deeksvat.co.uk

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.