Revenue News: Nursing & Home Carer services and green fees: The application of the VAT exemption

Wednesday, February 26, 2014

by Nick Ryan

The Irish Revenue has released two e-briefs of note on VAT both of which focus on the application of the exemption of VAT for certain supplies.
Revenue eBrief no. 57/13 continues the thread of discussion on the provision of medical services by looking to firmly establish the position for home care providers and the involvement of employment agencies.
What is interesting about this eBrief is its strong focus on the position of employment agencies and the stress made to clearly reiterate that qualification for exemption is determined on the basis of the delivery of care/medical services. Where a person, or business, acts as the principal in the provision of the care services and, is recognised by the HSE as a home care provider then the exemption will apply. A number of ancillary conditions should be met to support this treatment. The second interesting point is that Revenue appear to be sending a clear signal that, in their view, it is not possible for an employment agency to act in such a capacity yet, by the inclusion of the second sentence in Paragraph 2, with the use of “If” there is the suggestion that an employment agency may qualify where they are the home care provider.
It also evident from the final section that Revenue is of a mind to enforce the position as reference is made to those organisations, with particular reference to employment agencies which, in Revenue’s view, are not in a position to apply the exemption and are merely suppliers of staff. This is a clear signal by Revenue that they intend to take action on this and will challenge any organisations applying the exemption which, in their mind, do not fall into the HSE/Home Care category.
The debate on the application of the exemption for medical/home care services will continue, it has been muddied to date with the position regarding locums and we would welcome more detailed guidance by Revenue as to their basis for the application of the exemption.
Meanwhile in eBrief 09/14 Revenue confirm its position following the CJEU judgement in the Bridport & West Dorset Golf Club. The issue here was the extent to which the exemption for the supply of services closely linked to sport or physical education should be applied. In this case, consideration was given to supplies of golfing facilities to non-members by non-profit making golf clubs.
Prior to the decision, green fees for non-members were considered to be taxable and, following this judgement, tax authorities have accepted that the exemption should also apply to non-member green fees with effect from 1 January 2014. This change comes with a proviso to allow non-profit making golf clubs the facility to make a claim for a VAT refund, subject to the 4 year time limit, for any VAT incorrectly accounted for on the green fee charges. Any claim must also consider adjustments for any input VAT claimed in the same period on the basis that the green fee income was taxable.
Within the eBrief Revenue confirm that any claims will trigger a Revenue audit and consideration to the application of unjust enrichment will also be considered. Revenue is also in consultation with the Golfing Union of Ireland in determining the guidelines to be applied for these retrospective claims.
The application of the exemption for sporting activities is one of those areas that, in my view, require review. The link constantly applied by Revenue of sport being a hobby and therefore not in business provides for one of VAT’s major anomalies in Ireland and there is merit in looking to distinguish between the “hobby” sporting pastime to the “business” of sport similar in distinguishing between amateur and professional i.e. amateur/hobby is exempt while professional/business is taxable?
If you have a question on either of these eBriefs then please contact Nick Ryan on or +353 238838181

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