Tuesday, 13 March 2012

Wales Air Ambulance and VAT on Fuel

Most of us would agree that Wales Air Ambulance provides an essential medical service. That is why we  are happy to give donations to the charity that runs this life saver.

Ken Sharpe has been campaigning for some time to exempt fuel the Air Ambulance Service uses from VAT, in a similar way that it is for Lifeboats.

However, the UK Government has said that whilst there is provision for an exemption from VAT for fuel  used in Lifeboats in the European Union VAT directive, there is no other similar exemption that could be applied to other charities.

Ken Sharpe has suggested that if we cannot exempt VAT on fuel for the Air Ambulance Service, the UK Government should instead provide a grant of an equivalent value to the VAT paid on fuel used.

Currently he has an e-petition, which I urge you to sign:

The Air Ambulance Service is forced to meet rising fuel prices year on year including VAT.

The Air Ambulance Service have saved successive governments millions and millions of pounds funded by charitable donations given by the general public to run what has proven to be an essential service.

Whilst the Lifeboat Service has been exempt from VAT on fuel costs since 1977, a similar privilege has not been afforded to the Air Ambulance Service;

We call on the government to have an urgent review of this situation and in doing so We call on the government to return in the form of grants to Air Ambulance Service providers all the future VAT which the Treasury collects from them so that the Air Ambulance Service is in practice exempt from paying VAT in the same way as the Lifeboat Service.

It seems strange to me that should you say have an accident in France, which required that you were flown home by Air Ambulance, that flight would be exempt from VAT. Or should you fall ill at home, the ambulance if it were a vehicle then the fuel used would also be VAT exempt. And if the Air Ambulance flying to your rescue was funded and operated by the National Health Service then the fuel would also be exempt from VAT. But an Air Ambulance if operated by a charity is not?

You can find a summary of the Common system of value added tax (VAT) (‘the VAT Directive’) on the following EU website.

It explains that "For socio-economic reasons, the following are exempted:

certain activities of general interest (such as hospital and medical care, goods and services linked to welfare and social security work, school and university education and certain cultural services);.....

To download the latest consolidated version:  VAT directive in PDF format.

Here under Title IX Exemptions Chapter 7 Article 148 you will find the exemptions for lifeboats:

(a) the supply of goods for the fuelling and provisioning of vessels used for navigation on the high seas and carrying passengers for reward or used for the purpose of commercial, industrial or fishing activities, or for rescue or assistance at sea, or for inshore fishing, with the exception, in the case of vessels used for inshore fishing, of ships' provisions;

Lifeboats are also exempt from VAT for certain equipment by virtue of The Value Added Tax (Equipment in Lifeboats) Order 2002.

Under Title IX Exemptions Chapter 2 Exemptions for certain activities in the public interest there is Article 132 and

1. Member States shall exempt the following transactions:

(c) the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned;

In the first place I think we can all agree that an Air Ambulance Service is in the public interest and/or a certain activity of general or public interest. It's then down to how you define provision I suppose.

I humbly suggest that for the provision of medical care you need supplies and equipment i.e. an ambulance to take the paramedic or doctor to the patient be that a vehicle or an aircraft specifically modified for the purpose, and fuel for the vehicle or aircraft is rather important you would think.

To me as an ordinary member of the public it seems air ambulances used for the provision of medical care in the exercise of the medical and paramedical professions are exempt from VAT transactions. And whom provides or pays for the service and the provision of medical care is down to Member states to define.

Most probably an over simplistic interpretation of complex VAT rules of which I have little knowledge, still a neat idea I hope you agree.

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