We have received confirmation from HMRC that the threatened retrospective repayments for pre April 2014 Heading 69 adjustments have been withdrawn. You will recall that Customs were considering re-visiting ‘Typing, secretarial, telephonist & clerical services’ where Trusts had (mistakenly) used this heading to reclaim the VAT on basic admin & clerical staff.
As expected; HMRC have acknowledged there has been a ‘misunderstanding’ with NHS Bodies regarding their entitlement to make claims under COS VAT Heading 69 (primarily due to the term ‘agency staff’ being included in the heading). It is now accepted that it was never HMRC’s intention for stand-alone agency staff to be eligible for recovery – only agency staff utilised by the provider of a typing, admin or clerical service.
HMRC have now reviewed the impact of this clarification, and have decided not to assess years up to and including 31 March 2014 to recoup VAT reclaimed in error by NHS bodies for the supply of administration & clerical agency staff under Heading 69.
Please note that assessments already in place relating to over claimed VAT for non-admin / clerical staff under Heading 69 (or other headings) will still stand and are not rescinded as a result of this decision.