Supplies of Staff to the NHS – VAT Concern

In a similar vein to the above point there could also arise situations where staff of all types – medical and otherwise – are seconded across to the NHS by charities and third parties. The NHS is very limited in the VAT it is allowed to recover. Indeed they can only recover VAT charged to them where it relates to a specified SERVICE they have bought in – so that service needs to be specifically listed on the Contracted out Services list which is amended by Treasury Order.

In looking at the available headings it is clear that under:

Laboratory services - that drug testing, forensic testing and managed laboratory services would be recoverable but stand alone supplies of reagents and consumable goods would not – nor would a hire or lease of lab equipment be eligible for VAT recovery.
Pathology services relating to specific patients should be VAT Exempt in any case.

Nursing Services – this would allow VAT recovery on charges for the provision of nursing services (unless these qualify as VAT Exempt) or on supplies of agency nursing staff BUT excludes the supply of Doctors or Locums and ambulance paramedics.

It would make sense to ensure that any supplier is clear on the nature of what they are called at potentially short notice to support the NHS with over this period. How their services are packaged could be key to avoiding a VAT risk to the supplier or a VAT cost to the NHS.

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