what is the purpose of vat testing
This represents a decision from the European Court of Justice in 2003 ruling that the then current UK VAT exemption for medical services was too wide. It introduced a âpurpose testâ to determine whether a medical service should be VAT exempt. What is the âpurpose testâ? The European ruling means that if the principle purpose of the medical service is the protection, maintenance or restoration of individualâs health it will remain VAT exempt. Thus core medical services (whether provided through the NHS or privately) remain free from VAT liability.