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Locums and VAT Payments

You may have seen an article in The Times on 28 June which referred to dozens of NHS Trusts in England being under investigation by HMRC over their alleged use of schemes to avoid VAT when employing locum or part-time doctors.

I would draw your attention to the position of GP locums employed through a Limited Company, often referred to as a service company; the services they provide are subject to VAT when the registration threshold for VAT has been reached.The threshold level includes all charges made by the company including but not limited to fees and the recovery of expenses.The registration threshold is currently £79,000.

Doctors working as locums through an agency should, if they have not already done so, take advice on the application of VAT to their work and if registration has not been effected on time how to mitigate any penalties and interest charges accruing for late registration by making voluntary disclosure.

Neither the LMC, GPC nor BMA can assist with VAT or other form of taxation advice, but I would encourage all doctors to seek appropriate specialist professional advice on all taxation matters.


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