I have a client who is VAT registered, however they do not charge VAT on all their sales. Is this correct?
The following information may help:
- Type of business - provides recruitment services within the Healthcare industry
- Customers - Vary from private healthcare organisations to the NHS. e.g. sales to private healthcare organisations include a VAT charge. However no VAT is being charged to sales provided to NHS.... is this correct?
- Also some recruitment services provided to private companies which are connected to the NHS / PCT also have no VAT on the sales
Is the above correct? when can a VAT registered company not charge VAT on it's sales?
I'm assuming that this is probably the same business that you asked about back in November.
(see here : http://www.book-keepers.org.uk/t51632559/vat-liability-is-it-zero-rated-or-exempt/?page=1)
There are all sorts of slight differences in scenarios so I thnk best that I direct you back to 701/57
(see here : http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&propertyType=document&id=HMCE_CL_000121)
probably best that you read that to prepare yourself for any scenario's that this client throws at you.
If there are issues with it just repost with the paragraph number that you are having issue with and we'll answer the specifics.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I think this may be if certain clients under the NHS are classed as training then they may have an exempt certificate? Its along time ago I delt with this so I may not be correct. If their client has an exemption certificate then they must provide a copy of it to the person that is invoicing them to prove they can't be charged VAT.
I think you may well need to ask a few more questions to the client.
Hopefully someone like Fraulk will be on here soon as I am not sure I am 100% correct and I would advise you get clarification from others as well.
This is a rusty subject for me having not delt with it for sometime, as I no longer work for that client.
Ok - under the VAT notice 701/57, Section 6, my understanding is:
1. If the employment business (i am assuming this also includes recruitments agencies), supplies registered health professionals as a principle to a 3rd party (where the 3rd party controls the work of the 'employee'), then this is deemed as a taxable supply of staff being made to the 3rd party - therefore standard rate VAT must be charged
2. If the employment company maintains and controls the 'employees' work, and the supply of medical care is being made directly to the final patient, then this is seen as a medical services being provided rather than merely supply of staff - therefore this service is 'exempt' for VAT purposes
3. By an informal extra-statutory concession,nursing agencies (or employment businesses that provide nurses and midwives, as well as other health professionals) may exempt the supply of nursing staff and nursing auxiliaries (care assistants) supplied as a principal to a third party, if the supply is of: a. a person registered on the register of qualified nurses & midwives maintained under article 5 of the Nursing & Midwifery Order 2001 providing medical care to the final patient
b) an unregistered nursing auxiliary (care assistant) who is 'directly supervised' by one of the above
c) an unregistered nursing auxiliary (care assistant), whose services are supplied to a hospital (NHS or private), hospice, care home with nursing under item 4 of Group 7, Schedule 9 VAT Act 1994 and form part of the care made to the patient.
Please correct me if i am wrong with the above / feel free to add to this
Apart from the top 3 scenarios, i couldn't find details of the VAT treatment if the following situation arises:
- Where one recruitment agency (agency A) supplies 'healthcare assistants' to another recruitment business (agency B). Therefore it is Agency B who will then supply the staff to either a private health clinich or a NHS PCT -
In this situation, what would be the VAT position of Agency A?
this is one of those areas that HMRC have been reviewing for several months; they look at contracts as well as invoices. It is essential that the parties involved take care to determine accurately what is being delivered, by whom, and to whom. And, just to complicate matters, I understand that HMRC have provided inconsistent advice to providers! Take care!
