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

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Dear The Christie NHS Foundation Trust,

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

1. Have you used ,or are planning to use a Direct Engagement firm? 
2. If you have, 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.

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 also answer questions a-h and provide any evidence in recorded format.

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

Dear Applicant

FOI Request – (Reference K623)

Thank you for your recent Freedom of Information request.

Under the terms of the Freedom of Information Act we expect to respond to your request within 20 working days. 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 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.

Should you have any reservations about how your request was handled or if you feel the information supplied is inadequate, you will have access to our internal review procedure which will be notified to you within the response to your request.

Kind Regards
 
FOI Team
The Christie NHS Foundation Trust
[The Christie Hospital request email]

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Dear Applicant

With reference to your FOI request below (reference K623), please can we seek some clarification from you before progressing further with your request.

With regards to Q6 below, there was no attached communication to your request. Please can you clarify whether you are also looking for the Trust to respond to the email with the FOI request detailed underneath your request?

We look forward to hearing from you. Your request will be placed on hold whilst we await this confirmation from you.

Once received, the 20 working day time frame for responding will commence, however we will endeavour to respond to you as soon as possible.

Kind Regards

FOI Team
The Christie NHS Foundation Trust
[The Christie Hospital request email]
www.christie.nhs.uk

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Dear FOI,

The attached communication from PlusUs is directly below question 6, but for your convenience, I insert it below again:

"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"

Yours sincerely,

Stephen Mhiribidi

Dear Applicant

With reference to your FOI request below (reference K623), please can we seek some clarification from you before progressing further with your request.

With regards to Q6 , please can you clarify what you are requesting.

We look forward to hearing from you. Your request will be placed on hold whilst we await this confirmation from you.

Once received, the 20 working day time frame for responding will commence, however we will endeavour to respond to you as soon as possible.

Kind Regards

FOI Team
[The Christie Hospital request email]  
www.christie.nhs.uk
Follow us @TheChristieNHS

The Christie NHS Foundation Trust
Wilmslow Road
Manchester M20 4BX

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Dear FOI,

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 also answer questions a-h and provide any evidence in recorded format. This is also on the original FOI, and you have already asked for clarification once before for something that was on the original FOI too; if you are finding it difficult to understand the questions, might I suggest that you pass it on to someone who understands and/or is involved in the procurement of such services.

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

Yours sincerely,

Stephen Mhiribidi

Dear Applicant

 

Thank you for your recent FOI request (reference K623).  Please find set
out below the responses to the information you have requested.

 

1.         Have you used ,or are planning to use a Direct Engagement firm?
Yes

2.         If you have, please list all you have used with dates. Liaison
wef 19th March 2019

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? Yes

4.         If you have outsourced this IR35 assessment function, did you
claim to supervise, direct and control your temporary workforce prior to
doing so? No

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? Medical Staffing Manager

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:

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.

The Trust is withholding this information as this information is
commercially sensitive. The Trust applies an exemption under Section 43 of
the Freedom of Information Act.

 

I do hope you find this information to be helpful.

 

However if you are unhappy with this response please let us know giving
your reasons for believing we have not satisfied the requirements of the
Freedom of Information Act 2000.  An internal review of the response will
then be undertaken and a further response issued to you.  This
correspondence will include details of the Information Commissioner who
you can contact if you remain dissatisfied with our response.

 

It would be greatly appreciated if you could spare a couple of minutes to
complete the following survey, which is monitored to help us improve the
service provided: [1]http://www.surveymonkey.co.uk/r/FOI_Appl...

 

If you have any queries, please get in touch. Please remember to quote the
reference number provided in any future communications.

 

Kind Regards

 

FOI Team

The Christie NHS Foundation Trust

[2][The Christie Hospital request email]  

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Stephen Mhiribidi

Dear The Christie 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 The Christie NHS Foundation 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 taken on a 'direct engagement model' similar to one 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 similar 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 - in this case, The Christie. Disclosure, on the other hand, would go a long way to either refute the suspicion or prove the model's unlawfulness or illegality.

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.

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 a similar model. Where public funds are used and there is potential tax avoidance that takes much needed cyclical funds away from the public purse, it would unreasonable to rely on a section 43 exemption. The contents of communications between yourselves (The Christie) 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.

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

Dear Applicant

Thank you for your email below requesting an Internal review.

I have passed this to the relevant department for review, under the terms of the Freedom of Information Act we expect to respond to your request within 20 working days.

Kind Regards

FOI Team
[The Christie Hospital request email]
www.christie.nhs.uk
Follow us @TheChristieNHS

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Dear Applicant

 

Further to your request for an internal review of our issued FOI response
dated 11 March 2019, please find set out below our revised response.

 

The Trust can confirm that we have reviewed your request and we consider
that the Section 43 exemption still applies, in particular point 2 of the
exemption ‘Information is exempt information if its disclosure under this
Act would, or would be likely to, prejudice the commercial interests of
any person (including the public authority holding it).’

 

As we are in the stages of agreeing a contract with a provider, all
correspondence relating to the terms and prices of that contract are
therefore commercially sensitive. None of the correspondence is in
relation to the operation of the service as we have not agreed a contract
or  commenced implementation as yet.

 

If you are not content with the outcome of your internal review, you may
apply directly to the Information Commissioner for a decision.  The
Information Commissioner can be contacted at:

 

Information Commissioner’s Office, Wycliffe House, Water Lane, Wilmslow,
Cheshire, SK9 5AF.

 

 

Kind Regards

 

FOI Team

[The Christie Hospital request email]  

www.christie.nhs.uk

Follow us @TheChristieNHS

 

 

 

The Christie NHS Foundation Trust

Wilmslow Road

Manchester M20 4BX

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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.