The REC received notification from HM Revenue and Customs earlier today that the Nurses Agencies Concession on VAT will continue to be available to employment businesses.
Following sustained lobbying by the REC’s Legal Team, HMRC has now revised its position on the concession which will continue to be available to agencies which are currently required to register with Care Quality Commission (CQC), even though they no longer need to register with it from October 1. HMRC will issue an amended VAT brief next week.
Earlier this year, HMRC issued a brief on the treatment of VAT for the supply of nurses which stipulated that amongst other conditions, employment businesses would need to be registered with the CQC in order to apply the concession.
Under the new CQC registration criteria, employment businesses and agencies will no longer have to register with it from next month. This would have meant that from October 1, businesses supplying nurses and other health care professionals would no longer be able to take advantage of the concession and VAT would have to be charged on the full cost of supply.
Commenting on the HMRC decision, Lorraine Laryea, REC Solicitor and Legal Advisor, said:
“This is a notable ‘win’ on behalf of agencies supplying into the nursing and social care sectors. Our members raised their concerns early on about the impact that the loss of the concession would have and we were able to drive a concerted campaign on this issue.
“Withdrawing the opportunity to make use of the concession would have resulted in an immediate increase in costs to clients at the worst possible time for public sector employers. We are delighted that HMRC has listened to the views of specialised recruiters and has taken appropriate action.”
