- HMRC issued Revenue & Customs Brief 9 (2025) following a First-tier Tribunal ruling that locum medical practitioners’ supplies to the Isle of Wight NHS Trust qualify for VAT exemption, challenging HMRC’s previous stance that the exemption only applied to GP out-of-hours services.
- The Tribunal’s decision allows businesses to reclaim overdeclared output VAT on locum services, but they must evaluate their partial exemption status, as exempt supplies limit input tax recovery, potentially complicating VAT compliance.
- Affected businesses should prepare for customer refund requests, reassess the application of VAT exemption in new contracts, review pricing models due to restricted input tax recovery, and update billing and accounting systems in accordance with forthcoming HMRC guidance.
Source rbcvat
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