Trusts may be eligible for “tens of millions” of pounds in tax rebates after a provider won its bid to reclaim VAT on the purchase of locum doctors, HSJ has reported.
Following a “fractious” legal battle dating back to 2021, the first-tier tribunal tax chamber ruled that the Isle of Wight Trust was incorrectly charged VAT when buying supplies of locum doctors.
The case brought against HMRC centred on the interpretation of a clause in the Value Added Tax Act 1994, which deals with VAT exemptions covering “health and welfare services”.
In a judgment published on 16 September, the tribunal ruled “that the appellant [IOWT] was incorrectly charged VAT” on the supply of locum doctors.
IOWT’s appeal was designated as the lead case of 20 others, 13 of which were also NHS trusts bringing similar claims.
This means that the 13 NHS trusts and seven other appellants were also successful in their appeals against HMRC. The identity of the other appellants is not known.
Date: 1 December