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Regarding HMRC’S View That NHS Direct Engagement Schemes are VATable

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Dear Countess of Chester Hospital NHS Foundation Trust,

The following is a Freedom of Information Act Request under the Freedom of Information Act 2000:

1. Have you used a Direct Engagement firm?
2. If so please list all you have used with dates.
3. For the purposes of IR35 assessments, do you claim to supervise direct and control (SDC) your temporary workforce (temporary staffing/finance will know) – and have policy relating to this?
4. If you have outsourced this IR35 assessment function, did you claim to supervise, direct and control your temporary workforce prior to doing so?
5. What are the job titles of the designated points of contact in your organisation with any direct engagement firms you may use, or have used?
6. Having reviewed the attached communication from one of the direct engagement firms (prior to answering the questions), the public interest articles linked and parliamentary select committee evidence at the end of this FOI - could you please confirm:

From: Plus Us [mailto:[email address]]
Sent: 05 February 2019 17:21
Subject: Important update regarding VAT and Direct Engagement of Locums

Dear

We are writing to inform you that on 31st January 2019, we were notified by HMRC that it has changed its view regarding the VAT treatment of the services provided by Plus Us Medical Care Services Ltd (PUMCSL).
HMRC’s most recent view is that the direct engagement services provided by PUMCSL should now be standard rated for VAT purposes. Since the very beginning, we have engaged and continue to engage with HMRC to ensure that our services operate in full compliance with prevailing tax laws. As a result, we are disappointed that HMRC has taken this decision, we disagree with it and we will be challenging it. However, as a compliant business, we must operate according to this updated HMRC position.
As such, VAT will be charged on the services that PUMCSL deliver to you. This will come into effect from 11 February 2019 when VAT will be applied on all invoices issued. Our services and pricing continue as usual and you still have access to our wide range of workforce management technologies and products.
Our Account Management Team are contacting the relevant people within your organisation to talk this through from an operational point of view. In the meantime, if you have any specific queries regarding HMRC’s latest position, please contact us via [email address] and we will ensure the best people support you.
Yours sincerely,

+Us Finance Team

a. Have board-members, and/or, if different, the points of contact within your trust for your Direct Engagement firm received this email?
b. If so please disclose a copy (please search only as far back as 30th January 2019 –likely received on 5th February 2019).
c. Please disclose all correspondence with any direct engagement firms since 30th January 2019 to these points of contact and the board until the date of response to this FOI.
d. Please disclose all minutes discussing Direct Engagement/VAT on locums since 30th January 2019 until the date of response to this FOI (by the board, finance team, temporary staffing, or other committee likely to discuss this matter).
e. Please disclose a copy of the letter sent by IHPA to your CEO at the beginning of May 2018 regarding Direct Engagement schemes. (link to notice of permission from the IHPA/commercial interest waiver - https://ihpa.org.uk/uncategorized/ihpa-a...
f. Please disclose any due diligence pursuant to the Criminal Finance Act 2017, you may have conducted as a result of the letter from IHPA, and the subsequent email reproduced above from a direct engagement provider if you received it.
g. For the avoidance of doubt, all communications/discussion with alternative direct engagement providers are to be considered within the scope of this request.
h. Please disclose all email or written discussion of this matter with any frameworks you may use, and identify the framework in question.

PUBLIC INTEREST REPRESENTATIONS:
Please consider these newspaper stories and the linked Parliamentary Select Committee Evidence as public interest representations with respect to qualified exemptions. We would remind you that full reasoning with respect to these exemptions must be disclosed if citing qualified exemptions.

We look forward to your response within the statutory timeframe of 20 days. Should you require clarification please contact us within 48 hours of receipt requesting this. All non-exempt information should be released on a point by point basis. It is not anticipated that this will engage the time limit but if it does then we require that you contact us early with guidance on how to refine the request to enable you to comply, and we expect all sections that would not engage the time limit to be complied with. If exemptions based on commercial sensitivity are cited we expect them to be fully justified with a full public interest reasoning – covering the newspaper articles linked below under public interest representations. If section 41 is cited for any part of the request please disclose the signed and dated non-disclosure agreement which forms the basis of this claim, and consider that the public interest is also relevant in such proceedings.

Thank you for your valued contribution to open governance and for taking the time to process this request.

Links to a few of the many public articles:

https://www.thetimes.co.uk/article/nhs-h...

https://www.dailymail.co.uk/news/article...

http://data.parliament.uk/writtenevidenc...

https://www.cheshire-live.co.uk/news/che...

Yours faithfully,

Stephen Mhiribidi

FOI, Enquiries (COUNTESS OF CHESTER HOSPITAL NHS FOUNDATION TRUST), Countess of Chester Hospital NHS Foundation Trust

Hello,

Thank you for your recent Freedom of Information request. Freedom of information only applies to corporate information; this e-mail confirms receipt of your request for this type of information only.

Under the terms of the Freedom of Information Act we will expect to respond to this request in 20 working days. However we are now investigating the nature of the search and the quantity of information requested. If there is a cost involved in collecting the information then we will suspend the period for response until such time as we receive your payment. We will advise you of any such costs.

In accordance with section 12 of the Freedom of Information Act 2000 where multiple requests for information are received from one person or by different persons who appear to be acting in together in a single campaign the estimated cost of complying with any of the requests is to be taken to be the estimated total cost of complying with all of them. To this effect your requests for information will be dealt with under the single reference number above.

There are also a number of exemptions which the Act permits with respect to releasing information. The information will be assessed for these exemptions prior to us releasing the information to you. We will advise you if we are unable to provide the information requested.

Please note that a significant amount of information is also available via our Publication Scheme which can be accessed via the Trust’s website www.coch.nhs.uk and one of its benefits is that it makes information easily accessible and without charge.

Freedom of Information Officer
Countess of Chester Hospital NHS Foundation Trust
[email address]

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FOI, Enquiries (COUNTESS OF CHESTER HOSPITAL NHS FOUNDATION TRUST), Countess of Chester Hospital NHS Foundation Trust

Hello,

Please see below the response to your Freedom of Information request.

The Trust is currently considering the implications of the recent HMRC ruling on its current ‘direct engagement’ approach, including any potential for legal action. For this reason, it is inappropriate to release any information at this stage.

Kind regards,
Freedom of Information Officer
Countess of Chester Hospital
[email address]

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Stephen Mhiribidi

Dear FOI, Enquiries (COUNTESS OF CHESTER HOSPITAL NHS FOUNDATION TRUST),

Thank you for your response. You have, yet again, failed to correctly cite exemptions under the act which is part of a recurring pattern from this department; and is the reason why the ICO's office had to contact you previously. You must cite the precise section and where relevant subsection relied upon along with any required public interest tests and prejudice tests for an exemption to be lawfully claimed.

I would remind you that any such exemptions apply as narrowly as possible and only to the information specifically used for any case. We therefore expect you to go through the response and release all information not directly pertaining to any legal action actively in course.

As regards the exemption you are seeking to claim it is presumed to be Section 32 (although you haven't claimed it). Although we will also consider Section 42

To claim a section 32 exemption:
1) Information must be held SOLEY as a result of or expressly for such proceedings.

This is obviously NOT the case with many of the things requested in this FOI and ALL documents not specifically relating to actual proceedings should be released - even if you intend to use them for proceedings if they have been held or acquired for ANY other purpose (admin, clarification of the current position, discussion as to what you will do going forward, communications from other DE firms). It is highly unlikely that all or even most is held for this purpose, and none of it will be where you have not filed proceedings. To that end kindly clarify (and/or consider as a further request):

1. Upon what date did you file proceedings or send PAPLs?
2. At which court did you file proceedings? (You will hold this in a recorded format)
3. Please disclose dated invoices for legal fees demonstration that this has genuinely occurred.

Or please release the information.

Section 42 - Legal Privilege

Only applies to communications between your legal advisors and yourself and some specific documents *created* for litigation. Please see Bellamy v Information Commissioner. It is anticipated that most of the information sought, if held, will fall outwith the scope of this and all non exempt information should be released.

Lastly there is also a public interest test to consider in respect of any legal advice obtained. There is a public interest in transparency and accountability, to promote public understanding and to safeguard democratic processes. There is a public interest in good decision-making by public bodies, in upholding standards of integrity, in ensuring justice and fair treatment for all, in securing the best use of public resources. In this particular case, there is a justifiable suspicion of wrongdoing especially as you have been, and still are, using a 'direct engagement model' that has just been shut down by HMRC (please see email in original FOI from PlusUs to providers). This is not a mere allegation and is backed up by HMRC's action on the model. It is also in the public interest to ensure that public resources are spent adequately and in a lawful manner. Tax avoidance is something that the Department of Health and Social Care has previously and continuously warned NHS Providers not to engage in. Non- disclosure of the requested information may aid and/or abet in the wholesale avoidance of tax by a public body , and further increase the suspicion of wrongdoing on the part of the public body- yourselves. Disclosure, on the other hand, would go a long way to either refute the suspicion on you as a public body and/ or prove the model's unlawfulness/ illegality, or legality.
Please also consider seriously your duty under the Criminal Finances Act 2017. The offence is of strict liability: no knowledge or intention is required on the part of the relevant body. Nor is there any requirement for the tax evader or facilitator to have been convicted. The offence makes a company/public body liable for failing to prevent the criminal acts of its employees and other persons (natural or legal) who are associated with it, even if the senior management of the company was not involved in or aware of what was going on.
There are three stages to the offence:

Stage one: The criminal evasion of UK tax.
Stage two: The criminal facilitation of this offence by a person acting in the capacity of a person associated with the relevant body/facilitator.
Stage three: The body failed to prevent the associated person from committing that facilitation.

You were previously made aware by IHPA of the flaws in the scheme that you use, but you do not seem to have taken any action or due diligence of the scheme.
It is of the public interest to understand fully why the public body took the decision that it did in engaging with the 'direct engagement model' and knowing what was discussed post action from HMRC on this, and other subsequent models you may have considered. Where public funds are used and there is potential tax avoidance that takes much needed cyclical funds away from the public purse, it would be unreasonable to rely on a section 43 exemption if you seek yo do this too. The contents of communications between yourselves and the exact mechanism of the model would go a long way to instill public confidence in your activities as a public body.

Please may you release all the requested information in recorded format.

We are mindful that individuals within the trust may not agree in conscience with what is going on but feel pressured or unable to depart from an organisational line - we are deeply sympathetic to this predicament.

Should any member of staff wish to make an anonymous whistleblowing disclosure this would be treated with utmost sensitivity and the identity of any whistleblower(s) will be protected. Such whistleblowing can be done anonymously by emailing [email address] , there is statutory protection for public interest disclosures under the Public Interest Disclosure Act 1998.

Yours sincerely,

Stephen Mhiribidi

Stephen Mhiribidi

Dear FOI, Enquiries (COUNTESS OF CHESTER HOSPITAL NHS FOUNDATION TRUST),

I am still awaiting a response to my reply to your response. Please respond promptly to this.

Yours sincerely,

Stephen Mhiribidi

FOI, Enquiries (COUNTESS OF CHESTER HOSPITAL NHS FOUNDATION TRUST), Countess of Chester Hospital NHS Foundation Trust

Hello,

The Trust acknowledge receipt of your email and will respond in due course.

Freedom of Information Officer,
Countess of Chester Hospital NHS Foundation Trust.

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FOI, Enquiries (COUNTESS OF CHESTER HOSPITAL NHS FOUNDATION TRUST), Countess of Chester Hospital NHS Foundation Trust

Hello,

The Trust acknowledge receipt of your email and will respond in due course.

Freedom of Information Officer,
Countess of Chester Hospital NHS Foundation Trust.

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Stephen Mhiribidi

Dear Countess of Chester Hospital NHS Foundation Trust,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Countess of Chester Hospital NHS Foundation Trust's handling of my FOI request 'Regarding HMRC’S View That NHS Direct Engagement Schemes are VATable'.

It is quite disappointing to see the same pattern of either ignoring FOI requests or inadequately responding by your Trust. As you may be aware, I have previously referred you to the information commissioner's office for similar behaviour. Please respond to the request in full with expediency without the need for the information commissioner's intervention.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/r...

Yours faithfully,

Stephen Mhiribidi

FOI, Enquiries (COUNTESS OF CHESTER HOSPITAL NHS FOUNDATION TRUST), Countess of Chester Hospital NHS Foundation Trust

Dear Stephen,

Thank you for your email, the matter is under further consideration and you will receive a response in due course.

Kind Regards,

Freedom of Information Officer,
Countess of Chester Hospital NHS Foundation Trust.

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Stephen Mhiribidi

Dear FOI, Enquiries (COUNTESS OF CHESTER HOSPITAL NHS FOUNDATION TRUST),

I am now referring you to the information commissioner as you have failed in your statutory duty to respond to this FOI.

Yours sincerely,

Stephen Mhiribidi

FOI, Enquiries (COUNTESS OF CHESTER HOSPITAL NHS FOUNDATION TRUST), Countess of Chester Hospital NHS Foundation Trust

1 Attachment

Hello,

Please find attached the response to your Freedom of Information request.

Kind regards,
Freedom of Information Officer
Countess of Chester Hospital
[email address]

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Stephen Mhiribidi

Dear FOI, Enquiries (COUNTESS OF CHESTER HOSPITAL NHS FOUNDATION TRUST),

1. Might I remind you that consideration of exemptions cannot be included in the time limits. It is our belief that this information can be retrieved within minutes. For the avoidance of doubt, manual interrogation of each mailbox is not necessary- there are search features available for that. I would be more than happy to provide advice and assistance to simplify this if your IT department is finding it difficult to conduct a simple search.

2. From your response to question 6.f. it seems to me that you have not carried out any due diligence at all. Outwith of the FOIA, it is now absolutely incumbent upon you to consult urgently with your legal team with regards the CFA 2017 - it could be negligent and potentoally attract criminal liabilities if you do not, considering all the information available to you and in the public domain with regards to this matter.

3. I have not referred you to the Information Commissioner yet.

As a separate FOI request if necessary, please disclose:

1. Please disclose the IR35 guidance and instructions you give to recruitment agencies you work with - with regards to status, and if relevant, assessment.

2. Please disclose how many doctors, nurses or allied healthcare professionals have been found outside the offpayroll rules since May 2017 (locating this data should be easy as this is regularly sent to NHSI)

3. Please disclose the process that you employ to determine employment status.

Yours sincerely,

Stephen Mhiribidi

FOI, Enquiries (COUNTESS OF CHESTER HOSPITAL NHS FOUNDATION TRUST), Countess of Chester Hospital NHS Foundation Trust

Hello,

The Trust acknowledge receipt of your email and will respond in due course.

Freedom of Information Officer,
Countess of Chester Hospital NHS Foundation Trust.

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We don't know whether the most recent response to this request contains information or not – if you are Stephen Mhiribidi please sign in and let everyone know.