- HMRC has changed its policy on VAT for locum doctors following the Isle of Wight NHS Trust v HMRC tribunal decision.
- The tribunal ruled that locum doctors can be considered “deputies” and are eligible for VAT exemption, even when supplied via agencies and not limited to out-of-hours services.
- This overturns HMRC’s previous narrow interpretation and broadens the VAT exemption for medical services.
- Organisations that have charged VAT on locum doctors in the past four years may be able to reclaim overpaid VAT, but must act quickly due to a four-year correction limit.
- Correct procedures must be followed for reclaiming VAT, including submitting an Error Correction Notification if the amount exceeds HMRC’s threshold.
Source: deeksvat.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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