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

Waiting for an internal review by Pennine Acute Hospitals NHS Trust of their handling of this request.

Dear Pennine Acute Hospitals NHS 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

PennineFOI atSalford, Pennine Acute Hospitals NHS Trust

RE: Freedom of Information Acknowledgement of receipt Ref code FOI9145/PAT/KA

Thank you for your recent Freedom of Information request made in relation to information held by Pennine Acute Hospitals Trust. Requests for information from one of the Care Organisations making up Pennine Acute Hospitals Trust (Fairfield General Hospital, Rochdale Infirmary, The Royal Oldham Hospital and North Manchester General Hospital) are now processed from the Salford Royal NHS Foundation Trust base of the Northern Care Alliance.

This email is an acknowledgement of your request, should the Trust find it is unable to respond to your request you will be notified following discussion with the service.
In accordance with Trust policy and the requirements of the Freedom of Information Act 2000, a period of 20 working days is assigned for processing requests. [Working days within the NHS refers to Mon-Fri.] Your request has been passed to relevant service(s) to provide details, should they require clarification on your request you will be notified.

The Trust will provide you with an explanation if we find that there is any reason why the 20 day timeframe cannot be met. The Trust will also provide details of any exemptions used in responding to your request.

Please contact us if you have any queries regarding your application.

Kind regards

Freedom of Information Office
Northern Care Alliance
Salford/Oldham/Bury/Rochdale/North Manchester Salford Team Tel: 0161 206 1130 (Monday to Friday) Pennine Team Tel: 0161 206 6610 (working days Mon/Tue and Thu)

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PennineFOI atSalford, Pennine Acute Hospitals NHS Trust

Dear Stephen

Please can you clarify the questions you require us to respond to? It looks like there are 2 separate requests within the email below but addressed to different email addresses. Please can you confirm which questions you would like the Trust to respond to?

Kind regards

Freedom of Information Office
Northern Care Alliance
Salford/North Manchester/Oldham/Rochdale/Fairfield
Salford Team Tel: 0161 206 1130
Pennine Team Tel: 0161 206 6610 (working days Mon/Tue and Thu)
(Advanced notice of annual leave:)

(NB all PAT related responses should be addressed to the PAT dedicated FOI email address)
[email address]

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Dear PennineFOI atSalford,

For clarification, Questions a-h are a continuation of question 6. They relate to the attached email from PlusUs and any subsequent and/or previous actions in connection to this and direct engage models. Please may you answer questions 1 to 6 including a-h, and provide any evidence in recorded format.

Yours sincerely,

Stephen Mhiribidi

PennineFOI atSalford, Pennine Acute Hospitals NHS Trust

Thank you for your email.

 

Please note that this mailbox is not monitored on Wednesdays and Fridays.
All Freedom of Information Requests will be processed as usual. However,
if your query is urgent, please contact the switchboard on 0161 624 0420,
who will redirect you to the appropriate service.

 

Kind regards,

 

The Freedom of Information Team

PennineFOI atSalford, Pennine Acute Hospitals NHS Trust

Thanks for providing clarification Stephen. I will forward on to the service to collate the information.

Kind regards

Freedom of Information Office
Northern Care Alliance
Salford/North Manchester/Oldham/Rochdale/Fairfield
Salford Team Tel: 0161 206 1130
Pennine Team Tel: 0161 206 6610 (working days Mon/Tue and Thu)
(Advanced notice of annual leave:)

(NB all PAT related responses should be addressed to the PAT dedicated FOI email address)
[email address]

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PennineFOI atSalford, Pennine Acute Hospitals NHS Trust

Dear Stephen

Re: Freedom of Information Request Our Ref – FOI/9145/KA

Further to your recent request made under the Freedom of Information Act we write to confirm that progress is being made with enquiries regarding your requested information.

We are unable to release information at this point however we shall endeavour to release this information to you as soon as possible. You may find it useful to look at information that has been pre-published on our website. http://www.pat.nhs.uk/

Annual Reports
http://www.pat.nhs.uk/about-us/annual-re...

Please be assured that the Trust will keep you informed of all developments with your current request.
Yours sincerely

Freedom of Information Office
Northern Care Alliance
Salford/North Manchester/Oldham/Rochdale/Fairfield
Salford Team Tel: 0161 206 1130
Pennine Team Tel: 0161 206 6610 (working days Mon/Tue and Thu)
(Advanced notice of annual leave:)

(NB all PAT related responses should be addressed to the PAT dedicated FOI email address)
[email address]

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PennineFOI atSalford, Pennine Acute Hospitals NHS Trust

2 Attachments

Dear Stephen

 

Please accept our apologies for the delay in responding to your request.
However, the Trust has now completed collation of data to support a
response to your recent Freedom of Information request.

 

Details requested have been attached to this email.

 

 

We trust these details will assist with your enquiries.  If we can be of
any further assistance in the future please do not hesitate to contact us
again.

 

 

Questionnaire

 

As a Trust we are keen to monitor and improve the services we offer. We’d
be grateful if you could take the time to answer the following questions
and provide us with any other feedback that may assist us with this
process:

 

           

Were you satisfied with the handling of your request?     YES/NO
Was your request handled in a timely manner?                YES/NO
Were you provided with sufficient information to assist you with YES/NO
your request?

            
                                                                                  

 

Yours Sincerely

 

Freedom of Information Office

Northern Care Alliance

Salford/North Manchester/Oldham/Rochdale/Fairfield

Tel: 0161 206 6610

 

(NB all PAT & combined related responses should be addressed to the PAT
dedicated FOI email address)

[1][email address]

 

 

 

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Stephen Mhiribidi

Dear Pennine Acute Hospitals NHS Trust,

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

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

I do not believe that you have adequately considered the public interest test when applying the section 43 exemption. You also haven't stated which part of section 43 you are relying on- please clarify. 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. 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.

Likewise, I do not think that your response to question 6. (d) is a reasonable excuse to not disclose the minutes of the meeting. Please may you also disclose the meeting minutes here as they would go a long way in instilling public confidence.

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