£2.65m VAT recovered from reviews for a large NHS Trust
CRSTAX led a focused VAT recovery programme for a large London NHS Trust in 2025. Working to a monthly timetable, we reviewed recent spend against COS headings, improved partial exemption position, and additional overhead VAT treatment. The work delivered £2,040,599 from retrospective COS checks, £204,222 from partial exemption reductions, and £406,920 from additional overhead input tax. We also set defensible VAT recovery percentages for 38 capital schemes, giving project teams a clear standard to follow.
The brief
We were asked to increase VAT recovery without slowing month-end. Priorities were to identify missed COS, calculate the yearly partial exemption position, and document decisions so Finance could claim in the next VAT return with confidence.
How we worked
Retrospective COS reviews
Each month, we looked back at the latest available spend and tested high-value suppliers, cost codes, and line descriptions against the COS headings. For qualifying items, we prepared short evidence notes so the Trust could confidently recover VAT with a consultant-backed position.
Partial exemption
We determine partial exemption positions through a structured analysis of taxable vs. exempt activities and related input VAT, applying the optimal partial exemption method for each project. This gives a robust, defensible recovery percentage and improved VAT efficiency.
Overhead input tax
We also identified additional overhead input tax, reviewing indirect cost centres, and reallocating expenditure. This ensured the partial exemption calculation captured the full scope of recoverable costs and provided additional recovery beyond the standard percentages.
Capital schemes
For 38 projects, we agreed practical VAT recovery percentages. This supports project teams and allows VAT to be reinvested into tight budgets at the point of inception.
Results from 2024/25
- £2,040,600 recovered from retrospective COS reviews
- £204,223 improvement in the partial exemption position
- £406,920 additional overhead input tax recovery
- 38 capital schemes with agreed VAT recovery percentages
Beyond the totals, the Trust now has a repeatable approach that helps cash flow with VAT being recovered via monthly VAT returns.
What this means for NHS finance teams
- Retrospective COS checks convert past spend into current year value
- Reducing the partial exemption position reduces liability vs HMRC methods, while providing additional overhead recovery.
- Clear VAT positions on capital projects save time for Finance, Procurement and Estates
Talk to the CRSTAX NHS VAT team
If you want a straightforward view of where additional VAT recovery may exist, contact us today to discuss options that fit your Trust.