HM Revenue & Customs (HMRC) issued a letter to the NHS in December 2013 stating that the proper tax point (time of supply) rules should be applied to Contracted-out services (COS) VAT recovery. This meant that COS VAT should be claimed on the VAT return for the period in which the invoice is dated, or [...]
In our October 2013 newsletter, we reported that HMRC is undertaking an investigation in to a number of VAT schemes used by NHS Trusts, which involve the hire of locum doctors and other staff on short-term employment contracts that fall outside the scope of VAT. HMRC’s Director-General for Business Tax, Jim Harra, has confirmed that [...]
The HFMA has now published the minutes of the September 2013 meeting of its VAT technical sub-committee, attended by representatives of the VAT profession, HMRC and NHS Trusts. No new VAT developments were announced, but the Committee did discuss several proposed changes to the NHS VAT rules, including the following; a ‘Framework’ agreement for the [...]
Another recent development is the launch of a consultation exercise by the EU Commission on the future of EU VAT rules for public sector bodies and activities in the public interest. As part of this exercise, the Commission has published a consultation document which sets out what it sees as the main issues, namely; possible [...]
In a letter to the Recruitment and Employment Confederation (REC), Treasury minister Danny Alexander has warned NHS Trusts against using artificial arrangements designed to avoid paying VAT on locum staff charges. This follows news reports about schemes used by a number of NHS Trusts, which involve the hire of locum doctors and other staff on [...]
The VAT treatment of locum medical staff has also been recently examined in the case of Rapid Sequence Ltd v. HMRC, which was heard before the First-tier Tax Tribunal (FTT). Rapid Sequence Ltd (the Company) was an employment business supplying locum doctors to NHS Trusts as a principal. The locum doctors operated either as self-employed [...]
HMRC has released updated guidance about changes to the VAT treatment of self-storage services, which came in to effect last year. Under the previous rules, the provision of a clearly defined space for the self-storage of goods was VAT-exempt (as a supply of land), unless the self-storage operator had ‘opted to tax’ the land/building for [...]
HMRC are continuing a programme of ‘aspect checks’ on NHS Trusts, whereby a visit is arranged to review a specific area of VAT compliance. One of the areas being checked is whether NHS Trusts are applying the correct VAT treatment to purchases of non-UK goods and services. Many of these goods and services are subject [...]
The Department of Health has recently released an updated guidance note for PCT and SHA legacy teams about closedown arrangements for VAT. The note advises that a final VAT return should be submitted for transactions processed in the period from 1st July to 31st August 2013. Organisations that have already deregistered can still claim input [...]
As discussed in our July 2013 newsletter, the VAT exemption for business supplies of research between NHS organisations and other ‘eligible bodies’ (such as universities and charities) is withdrawn with effect from 1st August 2013. HMRC has now published detailed guidance about this withdrawal, which states that the VAT exemption is no longer available for [...]