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HM Revenue and Customs Brief 40/10

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Issued 22 September 2010

VAT: supplies of nurses, nursing auxiliaries and care assistants by state regulated agencies

This brief announces a consequential amendment to the nursing agency concession (previously detailed in HM Revenue & Customs (HMRC) Brief 12/10) that allows VAT exemption of certain services provided by nursing agencies (the Nursing Agencies’ Concession).

With effect from 1 October 2010 (as a result of changes announced in the Health and Social Care Act 2008), the legal requirement for nursing agencies to be registered under the Care Quality Commission will cease and responsibility for quality standards will pass to those organisations that provide the regulated activity.

This consequential amendment ensures that nursing agencies that currently benefit from the concession continue to do so from 1 October 2010.

The nursing agencies’ concession

By concession (HMRC regularly reviews these), nursing agencies (or employment businesses that provide nurses and midwives, as well as other health professionals) may exempt the supply of nursing staff and nursing auxiliaries supplied as a principal to a third party, if the supply is of:

  • a person registered in the register of qualified nurses and midwives maintained under article 5 of the Nursing and Midwifery Order 2001
  • an unregistered nursing auxiliary who is 'directly supervised' by one of the above
  • an unregistered nursing auxiliary, whose services are supplied to a hospital (NHS or private), hospice, care home with nursing under item 4 of Group 7, Schedule 9 VAT Act 1994 and form part of the care made to the patient

The institution to which staff are supplied may be operated by a local authority, NHS body, charity or other organisation operating in the public or private sector.

To qualify for the concession, the employment business must be registered with one of the following organisations:

  • Care Quality Commission (formerly known as the Commission for Social Care Inspection)
  • Scottish Commission for the Regulation of Care
  • Care Standards Inspectorate for Wales
  • Northern Ireland Health and Personal Social Services Regulation and Improvement Authority

For the supply of nursing auxiliaries or care assistants to benefit from the concession, they must undertake some direct form of medical care, such as administering drugs or taking blood pressures, for the final patient. The concession does not apply to supplies of general care assistants who are:

  • only involved in providing personal care such as catering, washing or dressing the patients
  • working in care homes without nursing where they do not require supervision by health professionals to provide their services

However, where a state-regulated domiciliary care agency supplies the services of its care assistants directly to the final patient, we would see the agency as making an exempt supply of welfare services – see Public Notice 701/2 Welfare and the section headed 'Supplies of contracted-out welfare services' below.

Consequential changes to the concession

From 1 October 2010, to qualify for the concession, the employment business must be registered with one of the following organisations:

  • Care Quality Commission (or for supplies on or after 1 October 2010 would have been required to be registered with the Care Quality Commission prior to that date)
  • Scottish Commission for the Regulation of Care
  • Care Standards Inspectorate for Wales, or
  • Northern Ireland Health and Personal Social Services Regulation and Improvement Authority.

The Guidance will be updated in due course.

Further information may be obtained from the Helpline on 0800 010 9000.


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© Crown Copyright 2010.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs



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Article Published/Sorted/Amended on Scopulus 2010-09-28 15:04:29 in Tax Articles

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