You may have noticed that NHS Professionals have recently been invoicing for agency staff without VAT, but this does not necessarily mean that VAT has not been charged.
Based on a new agreement between NHS Professionals and HMRC, where an agency company is directly supplying agency staff to your organisation and subsequently billing through NHS Professionals, no VAT is to be shown on the NHS Professionals’ invoice. Backing documentation, however, is be supplied with the invoice, and it is from this backing documentation that the agencies’ VAT charge can be identified, and any VAT recovery on eligible nursing services can be calculated. HMRC has given an indication to NHS Professionals that the backing documents should be sufficient to support input VAT recovery, although HMRC has not confirmed this in absolute terms.
Based on the indication given by HMRC we do not consider it necessary to obtain a copy of the agency company’s invoice to recover the eligible VAT. However, copies are collated by NHS Professionals should they ever be required. For agency companies that use self-billing, you can obtain these on-line via your NHS Professionals’ account. Alternatively, for agencies who do not operate self-billing, you can request copies of the invoices from NHS Professionals directly if they are required as the result of a VAT inspection. However, NHS Professionals will not provide copies of agency invoices as a matter of routine.
NHS Professionals will continue to show VAT on their invoices in respect of supplies of their own bank staff.
We recommend that all organisations check whether the invoices received from NHS Professionals have backing documentation to ensure that all eligible VAT is being recovered correctly.