NHS Trusts might have their VAT reclaims accepted by HMRC, according to a report by RSM. The claims cover overpaid VAT mainly on take-away food, drugs and prostheses. A sticking point has been HMRC viewing the claims, going back many years, as belonging to past NHS bodies like local Health Authorities, rather than the current NHS Trusts. The case of Nth Lincs & Goole Hospitals NHS Trust vs HMRC found in the NHS’ favour in March 2015. On a preliminary issue the First-Tier Tax Tribunal found that the rights to VAT claims by earlier NHS bodies had been transferred to the successors. Although that decision said it was not a test case it is now hoped that HMRC may accept the general point for the health and care sectors.
Tax Barrister, Accountant