HMRC have this morning released the first of three proposed tranches for the new COS Heading Guidance. The release contains detail for 58 of the 76 headings (though not headings 1 through to 58) online, which can be accessed here: COS Heading Update

The main changes (or clarifications) which are expected to have an impact on NHS bodies are as follows:

• Heading 10 – Includes The hire of agency staff relating to catering – The precise meaning of this line is to be confirmed with HMRC, as this traditionally has not been included in the scope of the heading and could potentially have a significant impact on Trust’s recovery.
• Heading 12 – Confirms that fees for the management of child care vouchers are excluded. We are often asked specifically whether such charges are eligible, this provides useful clarification on the point.
• Heading 15 – More detail (though no revision or change) in respect of what qualifies as a conference service – “a composite service which could include supplies of staff, hire of venue, equipment, hotel accommodation, catering etc. The keyword is ‘services’ – to qualify for recovery the government department or health authority must be receiving more than a supply of accommodation and catering, and the services must be in connection with their non-business activities”.
• Heading 33 – Includes internet hosted library services. This was not specifically outlined in the previous guidance, so is a useful update.
• Heading 40 – Patient Appointment/reminder services – again, this service was not specifically outlined previously in the guidance and is a useful addition for clarification.
• Heading 51 – Previously only referred to a cuttings service – it now specifically identifies that this could be a physical or electronic press cutting service.
• Heading 60 – Includes the “provision of security guards and staff security surveillance equipment (CCTV, surveillance cameras), security patrols and the secure transport of equipment”. It is assumed that the service of equipment hire (i.e. CCTV) will be eligible when included as part of a single supply of security services – but will be seeking further clarification as to whether the scope of this heading will cover the hire of security equipment (like CCTV) on its own.
• Heading 63 – Confirms that electronic storage services are eligible for recovery – as useful clarification to this heading as it was not specifically identified previously.
• Heading 65 – Although it is likely to have been reclaimed where appropriate, HMRC have confirmed that on-line training is eligible for recovery under this heading.
• Heading 67 – An interesting amendment which is expected to have little impact on NHS Trusts – charges for use of VIP lounges at airports and stations will be eligible for recovery.
• Heading 74 – HMRC have confirmed what they interpret ‘original research’ to mean for the purpose of this heading as research that:“Involves surveys, field tests or new research design thinking, interviews or observation conducted specifically in relation to the subject of the research (as opposed to merely collating existing data); and Extends to secondary data analysis, interpretation (which may include options and/or recommendations) or a systemic review of evidence (rather than mere data gathering and recording)”.

We eagerly await the release of the next tranche of headings from HMRC, and will update you with any further guidance.

Those headings which have been released on the website are in force from today, but the existing guidance (April 2014) should be utilised for all other headings.

If you have any queries relating to the new guidance and it’s anticipated impact, please do not hesitate to contact us on 01732 868266.