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

Stephen Mhiribidi made this Freedom of Information request to North Cumbria University Hospitals NHS Trust

This request has been closed to new correspondence from the public body. Contact us if you think it ought be re-opened.

The request was successful.

Dear North Cumbria University 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


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 -
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.

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:

Yours faithfully,

Stephen Mhiribidi

FOI.requests (RNL) North Cumbria University Hospitals, North Cumbria University Hospitals NHS Trust

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Heron Rhia (RNL) North Cumbria University Hospitals, North Cumbria University Hospitals NHS Trust

Thank you for your email. Please note that I am out of the office until
Monday 18 February 2019.

If you have an urgent enquiry during office hours, please call 01228
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Best wishes Rhia

FOI.requests (RNL) North Cumbria University Hospitals, North Cumbria University Hospitals NHS Trust

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Thank you for your request for information, which is being processed under
the terms of the Freedom of Information Act 2000.  The time period for
processing your request is 20 working days from the date of receipt of
your email, which means you should receive a response from the Trust


In all correspondence relating to this request, please quote the reference
FoI 004976.


Thank you


Freedom of Information Team
North Cumbria University Hospitals NHS Trust
Cumberland Infirmary

Email: [1][email address]




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FOI.requests (RNL) North Cumbria University Hospitals, North Cumbria University Hospitals NHS Trust

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Thank you


Freedom of Information Team
North Cumbria University Hospitals NHS Trust
Cumberland Infirmary

Email: [2][email address]


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