In The King (on the application of Gloucestershire Hospital NHS Foundation Trust v HMRC [2023] UKUT 28 (TCC) (30 January 2023) the Upper Tribunal (UT) found that the supply of ‘consumables’ to an NHS trust formed part of a single supply of managed theatre services and therefore input tax could be recovered.
The background to the case rests upon the way in which VAT recovery works for NHS trusts and other public bodies. Health bodies have been encouraged to contract out services to the private sector which would have traditionally been performed in-house. It is recognised that many of these services would be subject to VAT and where they were acquired for ’non-business’ purposes the non-reclaimable VAT could act as a disincentive to contracting out.
It was therefore decided to compensate health bodies (including NHS trusts) by a direct refund mechanism which is provided for in VATA 1994...
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")