We have provided VAT advice on behalf of an organisation which required advice setting out the VAT implications to both its Administrative hubs in both their partnership arrangements and future autonomy, and the potential VAT impact to their branches when procuring services under such arrangements.
Based upon our understanding of the executive agency, its Administrative hubs and its branches, we identified several different supply-chain ‘scenarios’ for consideration of different VAT treatments based upon the relevant VAT regulations applicable.
Based on current status, the Administrative hubs provide services to the branches under NHS VAT division and S41 status. The Administrative hubs in turn are currently able to recover VAT on certain costs under the Section 41 COS rules.
We have been able to advise in a written outline report which clarifies the relevant NHS and non-NHS VAT rules which has included some of the following VAT issues:
- Current VAT liability of supplies purchased
- VAT status of supplies by Administrative hubs to their branches
- Eligibility for recovery of VAT on certain supplies under the Section 41 COS rules
- Eligibility for recovery of VAT as business input tax
- Differences between recharges of costs net or gross of VAT, depending upon circumstances
- VAT treatment of specific property, utility of telecoms services
- VAT treatment of specific staff-related transactions (agency, interims, etc)
- Other VAT issues as applicable (e.g. capital good scheme or partial exemption adjustments)