Parliamentary Search

Written question asked by Lord Hunt of Kings Heath (Labour) on Tuesday, 24 October 2017, in the House of Lords. It was due for an answer on Tuesday, 7 November 2017. It was answered by Lord O'Shaughnessy (Conservative) on Tuesday, 7 November 2017 on behalf of the Department of Health.

NHS: VAT

Question

To ask Her Majesty's Government whether they intend to ensure that when NHS bodies set up wholly owned subsidiaries in order to claim VAT refunds, new staff who join those subsidiary companies are (1) employed on NHS terms and conditions, including membership of the NHS Pension Scheme, and (2) classified as NHS employees.

Answer

National Health Service bodies are responsible for deciding locally the most appropriate structures they need to put in place to deliver services to their patients within available resources, meeting any tax liabilities that may arise. Recent guidance to NHS trusts and foundation trusts from the Department states that ‘the only tax advice that the Department deems acceptable is that necessary for the fulfilment of statutory functions and or to assist with compliance with tax rules beyond in house expertise. Tax avoidance schemes should not be entered into under any circumstances.’

It would be for those subsidiary companies to decide what terms and conditions they need to offer new staff to enable them to attract the skills and talents required to deliver their services. They would need to apply for new, eligible staff to access the NHS Pension Scheme. To be eligible, they would have to be employed under a standard NHS contract (or sub contract to a NHS standard contract) and wholly or mainly (i.e. more than 50% of their work) either directly or supporting the delivery of clinical services to patients under that contract. These new staff would be classified as employees of the subsidiary company, not the NHS.

NHS Improvement is working with the NHS to ensure adherence to relevant legislation and guidance, as well as encouraging the sharing and adoption of best practice in working with employee representatives and unions on these issues.

Secondary information

Type
Written question
Reference
HL2441
Session
2017-19
Subjects
Conditions of employment NHS Pensions Repayments VAT Subsidiary companies
Link
View this Written question on www.parliament.uk