The ECJ has ruled that the processing of payments between, in this case, a patient’s account and their dentist through BACS is akin to a ‘debt collection’ service and that the fees charged in relation to which are subject to VAT. AXA had argued that the fees it charged were for a ‘financial service’ and exempt.

 This surprise ruling has wide ranging repercussions beyond the realm of private dental insurance to the VAT treatment of any fee charged by firms for the processing of credit or debit card transactions as well as BACS payments.