HMRC treats GMC-registered locum doctor supplies as VAT-exempt after Isle of Wight NHS Trust ruling
This page records one dated change. For the rules in United Kingdom as they stand today, see the United Kingdom guide →
- Jurisdiction
- 🇬🇧 United Kingdom
- Tax
- VAT
- Change type
- Update
- Status
- In force
- Impact
- Action required
- Announced
- 17 July 2026
- Instrument
- GB-RCB-6-2026
- Authority
- HM Revenue & Customs
- Systems
- Tax engine, Invoicing, ERP
- Verified
- Fetched from official source · high confidence
Employment businesses supplying GMC-registered locum doctors, and the healthcare bodies that engage them.
Employment businesses supplying GMC-registered locum doctors should stop charging VAT on those supplies and assess refund claims for overdeclared output tax under Revenue and Customs Brief 6 (2026).
Tax engineInvoicingERP
HMRC published Revenue and Customs Brief 6 (2026) on 17 July 2026, changing its published position on the VAT liability of supplies of GMC-registered locum doctors made through employment businesses, following the First-tier Tribunal decision in Isle of Wight NHS Foundation Trust v HMRC [2025] UKFTT 1114 (TC). Such supplies, previously treated as taxable, are treated as exempt under Item 5, Group 7, Schedule 9 to the Value Added Tax Act 1994. The Brief sets out the process for claiming refunds of overdeclared output tax.
What changed in detail
HMRC published Revenue and Customs Brief 6 (2026) on 17 July 2026, changing its published position on supplies of GMC-registered locum doctors made through employment businesses, following the First-tier Tribunal’s decision in Isle of Wight NHS Foundation Trust v HMRC [2025] UKFTT 1114 (TC). Such supplies, previously treated as taxable, are now treated as exempt under Item 5, Group 7, Schedule 9 to the Value Added Tax Act 1994. The Brief sets out the process for claiming refunds of output tax overdeclared under the earlier treatment.
What it means
Exemption is not unambiguously good news: it removes output tax on these supplies, but it also removes the right to recover input tax attributable to them — model the recovery position, not just the refund claim. The immediate action is the refund claim for overdeclared output tax; the ongoing question is what the loss of input recovery does to margins on locum placements. There is no single commencement date to diarise here — the Brief takes effect by restating HMRC’s position rather than by a date fixed in law.
Proof
These supplies would previously have been treated as taxable supplies, but are now treated as exempt.
Source snapshot of the official page. Open full size ↗Archived from the official distribution · HMRC Revenue and Customs Brief 6 (2026), published 17 July 2026 · www.gov.uk