In Mainpay Limited v HMRC [2020] TC07690, First Tier Tribunal (FTT) found Mainpay was making a taxable supply of medical staff for VAT rather than exempt medical care.

Mainpay is an umbrella company that provides temporary medical staff. Between November 2010 to January 2014, Mainpay made supplies of medical staff to a company called Accident & Emergency Agency Limited which in turn had separate contracts for supplies to mostly NHS Trusts.

  • Mainpay has separate contracts with various medical consultants and doctors and treated them as employees, paying Pay-As-You-Earn (PAYE) and National Insurance (NI).
  • Mainpay treated the supplies as VAT-exempt medical care.

HMRC argued the supplies were of staff at the standard rate and made an assessment to VAT of £164,866 for the period under review.

Mainpay contended:

  • That the control of the medical professionals did not pass to the NHS Trust’s where the consultants were deployed.
  • This meant there was no supply of staff but exempt supplies of medical care and appealed the case to the FTT.

The FTT rejected the ‘control’ argument put forward by Mainpay and concluded that though NHS Trusts did not have the ‘contractual control’ over the staff, they had some 'operational control'. It gave the examples of issues in relation to health and safety on-site, use of IT and which ward or operating theatres were to be used at any one time.

Accordingly, there was a supply of staff. The appeal was dismissed.


Health and welfare: VAT
Reduced rating, zero-rating and VAT exemption can apply to various services relating to medical care, health and welfare.

Supply of GPs was a service and VAT exemption upheld
In Archus Trading Limited v HMRC [2020] TC07557, the First Tier Tribunal (FTT) concluded that the supply of GPs were supplies of services, not staff, and qualified for VAT exemption.

External links

Mainpay Limited v HMRC [2020] TC07690