Increasingly, NHS organisations are entering into arrangements with third-party suppliers to make facilities available to those suppliers to carry out private health services from NHS premises.

The assumption seems to be that no VAT is due on income received by the NHS for supplying facilities, however when examined in more detail, these may include a mixture of supplies which may be subject to VAT.  Examples include licenses to occupy land/premises (exempt provided there has been no option to tax), staff or ‘services’ of staff (potentially standard-rated) and other ancillary supplies (utilities, cleaning, catering, consumables) which may be exempt or standard-rated depending upon the specific circumstances.  This potential VAT headache is complicated further when the facilities are provided in return for a ‘profit share’, which is not clearly defined and could potentially be fully taxable.

If you are entering into such arrangements, please contact us at the earliest opportunity to determine the correct VAT liability.