HM Revenue & Customs publishes Policy paper “VAT liability of the supply of temporary medical staff (2026)” on 17 July 2026, confirming that they have reviewed their policy in response to the BBSP VAT Tribunal decision Isle of Wight NHS Foundation Trust v HMRC [2025] UKFTT 1114 (TC).

The Policy Paper confirms that HMRCs view is that supplies of GMC registered Locum Doctors is exempt from VAT, even where provided by an employment business. The paper states that “other health professionals (such as, allied health professionals, anaesthesia and physician associates) registered with the GMC are not within the scope of this exemption”. There does not appear to be a clear legal basis to exclude anaesthetists and physician associates from the exemption.

HMRC set out the criteria for a claim to be made in respect of VAT charged in error:

1. you charged output tax at the standard rate
2. you now consider the supplies should have been exempt from VAT
3. the overdeclared output tax relates to supplies made within the last 4 years

along with a dedicated mailbox for claims to be submitted to ccg.locumdoctorsclaim@hmrc.gov.uk citing reference “Locum doctors claim RCB 6/26”

HMRC reiterate that claims will need to reflect restrictions on input VAT previously recovered and will be subject to unjust enrichment checks.

What Should NHS Bodies Do Now?

HMRC policy is clear – the supply of Locum Doctors is exempt from VAT.

NHS bodies are urged to point suppliers towards HMRCs updated policy and request that claims for overpaid VAT are lodged, going back four years, without delay.

Finance Teams may wish to consider whether it is appropriate to pay ‘VAT’ charged incorrectly on invoices for qualifying supplies from the date of the brief.

Where Can I Get Help?

BBVAT can support NHS bodies and other organisations that have suffered VAT on Locum Doctors incorrectly, to recover sums due.  Contact us at info@bbvat.co.uk for a free, no obligation chat about how we can support you.