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Policy paper

VAT liability of the supply of temporary medical staff (2026)

Published 17 July 2026

© Crown copyright 2026

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This publication is available at https://www.gov.uk/government/publications/revenue-and-customs-brief-6-2026-vat-liability-of-the-supply-of-temporary-medical-staff-locum-doctors/vat-liability-of-the-supply-of-temporary-medical-staff-2026

Purpose of the brief

This brief provides an update on HMRC’s position on the VAT treatment of past and present supplies of General Medical Council (GMC) registered locum doctors.

This follows the First-tier Tribunal decision in Isle of Wight NHS Foundation Trust v HMRC [2025] UKFTT 1114 (TC). 

It also provides guidance on how HMRC will handle claims of overdeclared VAT relating to affected supplies while current legislation remains in force.

Who should read this

You should read this brief if you’re:

  • an NHS body
  • a private healthcare provider
  • an employment business supplying locum doctors
  • a VAT adviser

HMRC’s current position

Under Item 5, Group 7, Schedule 9 of the VAT Act 1994, “The provision of a deputy for a person registered in the register of medical practitioners” is exempt from VAT.

Having considered the implications of the Tribunal’s decision and reviewed policy, HMRC’s position is that supplies of GMC registered locum doctors may fall within this exemption. This includes where locum doctors are supplied via an employment business.

This position applies only to supplies of GMC registered locum doctors. It does not extend to supplies of other healthcare professionals or to general staffing services outside the scope of Item 5. References to ‘registered locum doctors’ only include individuals who are registered with the GMC and who perform medical services in that professional capacity.

The exemption applies only where the individual supplied is a registered medical practitioner performing a role that must be carried out by such a practitioner. Other health professionals (such as, allied health professionals, anaesthesia and physician associates) registered with the GMC are not within the scope of this exemption.

Claims

HMRC will review claims on a case-by-case basis. This will include consideration of unjust enrichment, partial exemption and whether overdeclared VAT has been correctly accounted for across the supply chain.

HMRC may request supporting documentation and will not process claims where there is ongoing litigation or where assurance activity is required.

How to claim a refund of overdeclared output tax

You may be able to claim a refund of overdeclared output tax on supplies of locum doctors if all the following apply:

  • you charged output tax at the standard rate
  • you now consider the supplies should have been exempt from VAT
  • the overdeclared output tax relates to supplies made within the last 4 years

Only the person who made the supply of staff and charged output tax can claim a refund.

Depending on the amount of overdeclared output tax, you can either:

  • adjust your return for the period in which you discover the overdeclared tax
  • claim a refund by making an error correction notification

HMRC will not pay a claim which would result in your unjust enrichment.

Error correction notifications

To make an error correction notification, you’ll need to:

  1. Complete form VAT652 — Notification of errors in VAT Returns.

  2.  Send the completed form by email, to: ccg.locumdoctorsclaim@hmrc.gov.uk.

  3.  Put ‘Locum doctors claim RCB 6/26’ in the subject line of your email.

Make sure you:

  • set out the basis of, and the reason for, the claim
  • show the amount being claimed
  • show how that amount has been calculated
  • break the amount down by reference to prescribed accounting periods
  • can provide copies of documentation used in the calculation of the claim if requested

Possible effect on recovered input tax

These supplies would previously have been treated as taxable supplies, but are now treated as exempt. This means you’ll need to consider the impact on associated input tax that you’ve recovered on previous VAT returns.

This includes considering how the partial exemption rules may affect you. You’ll need to make the appropriate adjustments to your claim, as you can only claim for the net amount.

More information

You can find more information on how to correct VAT errors and make adjustments or claims (VAT Notice 700/45). This guidance includes:

  • section 4 — Correcting VAT errors on a return already submitted
  • section 5 — How to claim a refund
  • section 9 — Unjust enrichment and the reimbursement scheme

You can find more information on partial exemption (VAT Notice 706).

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