Following the Isle of Wight NHS Trust case, HMRC has issued updated guidance confirming that supplies of agency locum doctors are VAT-exempt. HMRC has confirmed it will not be appealing the decision.
What This Means for NHS Organisations
This ruling creates a significant opportunity for NHS bodies to recover VAT overpaid on agency locum costs. Suppliers can reclaim VAT paid over the last four years, subject to adjustments for partial exemption and unjust enrichment provisions.
NHS organisations should:
- Review historic VAT charged on locum doctor spend within the four-year cap
- Engage with suppliers to discuss how both parties can benefit from the VAT recovery
- Understand the practical implications of the new guidance for future procurement
How CRSTAX Can Help
We’re supporting NHS organisations to understand the implications of this guidance and to manage the VAT recovery process effectively. Our team can help you identify potential recoveries, liaise with suppliers, and ensure compliance with HMRC’s requirements.
Get in Touch
If you’d like to discuss how this affects your organisation or explore potential VAT recovery opportunities, contact our team today.