Gareth Llewellyn from Swansea-based All Wales Ambulance Services is calling for the immediate fair treatment from HMRC because their all-important provision is being threatened by a lack of cash.
All Wales Ambulance Services is a family-run company that for 29 years has provided essential non-emergency patient transport provision to people in the south west and mid-wales regions. Their duties involve providing timely and safe transport for patients undergoing hospital appointments with many patients being in wheelchairs or stretchers. The service also takes COVID-19 patients between hospitals and field hospitals and vice-versa. This vital community service currently provides employment for 73 members of staff using 16 ambulances, typically involving the discharging from hospital of 1,000 patients per month.
The patient transport services boss Gareth Llewellyn says,
“At the best of times our business runs on very tight margins, which is what you would expect given that our customers are the NHS and of course the public we serve. For the last four years we have been battling with HMRC who are denying us crucial VAT recovery for resource strapped ambulance patient transport services. We provide non-emergency services but the reality is that with journeys lasting up to 60 miles, in many cases we are in fact temporary emergency services too.
“We have received unfair and inconsistent treatment because there are other companies in our sector offering identical services who are able to reclaim VAT. The people who are set to potentially lose out are those in Wales who depend on our valuable service. We know that it costs about £950 a day to keep someone in hospital and we allow for quick patient discharges, avoiding ‘bed blocking’.
A missed hospital appointment costs the NHS about £250 every time this occurs.
Gareth Llewellyn continues,
“We urgently need to recover VAT to pay for ongoing fuel costs, outsourced staff, training and maintenance costs which can then be spent on providing a better customer delivery in these exceptional circumstances. Our business is under extreme pressure because amongst other things we are having to pay for personal protective equipment (PPE) and just this week alone spent £7,000 on this essential equipment. Our janitorial costs have trebled, due to deep cleaning and we’ve even had to modify vehicles at a rate of £800 for each ambulance. All of these items attract VAT which we are unable to recover.
“And while all this is happening, we’re experiencing record high levels of staff absences due to self-isolation. Of course, we feel proud to be part of the ‘NHS family’ and making a difference but it’s crucial that we draw people’s attention to the challenges we are currently facing.”
The All Wales Ambulance Services Ltd is a founder member of a new organisation set up by the Midlands-based accountancy firm, Dains LLP. Phil Luty, their Indirect Tax Partner, set up the Patient Transport Action Group (PTAG) to support firms concerned about the unfair treatment by HMRC.
Phil Luty said,
“Many companies in the patient transport sector were struggling before the coronavirus pandemic and now many have reached crisis point. This is not an issue about job retention or loans, it’s about cash rightly owed to the service providers which is being denied by HMRC. These funds could be immediately used to maintain and even enhance service levels. HMRC’s own Brief (03/19) on the matter indicates that such non-emergency patient transport services qualify for zero-rating because of a test for ‘notional’ seating capacity.
“The vehicles used by All Wales Ambulance Services can all be converted to seat 10 people or more, which is the VAT Act 1994’s definition of what qualifies for zero-rating, but most are simply fitted out differently to accommodate wheelchairs and stretchers. Zero-rating of the service would allow VAT recovery on associated costs which is currently blocked. For All Wales Ambulance Services they would justifiably receive in the region of £250,000 in back claimed VAT, with the ongoing benefit of a 20% reduced cost base. What this shows is that more than ever, this is their time of need.”
The new Patient Transport Action Group is providing a voice to those in the sector who are asking for greater certainty and clarification.
Phil Luty adds,
“We estimate that a total of over £30 million is owed to companies who have worked tirelessly to deliver essential services to the NHS and to the public. If we want the public to continue to receive these life-saving services, it is imperative that HM Revenue takes note at this crucial time. We are now speaking to MPs in the member constituencies and feel pleased with the positive feedback to date. We’ve had a very helpful conversation with Plaid Cymru MP, Ben Lake who will be assisting us in spreading our important message.”
Following the release of this story HMRC Commented:
“The VAT treatment of patient transport services varies depending upon the type of vehicle required. Patient transport in an ambulance is VAT exempt. [This was confirmed in 2018 by the Upper Tribunal in The Commissioners of HMRC v Jigsaw Medical Services Limited  UKUT 222].
“Transport provided in other vehicles is subject to 20 per cent VAT unless the vehicle carries 10 or more people (fewer if seats have been reduced to accommodate wheelchairs), in which case it is zero-rated for VAT.
“The Government has announced measures to assist businesses that are facing financial hardship as a result of the crisis, including deferring VAT payments and other measures to assist cash flow. These are set out on GOV.UK”