VAT Newsletter Late October 2010
VAT exemptions for nursing agencies
HMRC have announced a consequential amendment to the nursing agency concession that allows VAT exemption of certain services provided by nursing agencies
With effect from 1 October 2010, the legal requirement for nursing agencies to be registered under the Care Quality Commission will cease and responsibility for quality standards will pass to those organisations that provide the regulated activity.
By concession nursing agencies (or employment businesses that provide nurses and midwives, as well as other health professionals) may exempt the supply of nursing staff and nursing auxiliaries supplied as a principal to a third party, if the supply is of:
- a person registered in the register of qualified nurses and midwives
- an unregistered nursing auxiliary who is 'directly supervised' by one of the above
- an unregistered nursing auxiliary, whose services are supplied to a hospital (NHS or private), hospice, care home with nursing and form part of the care made to the patient
The institution to which staff are supplied may be operated by a local authority, NHS body, charity or other organisation operating in the public or private sector. To qualify for the concession, the employment business must be registered with one of the following organisations:
- Care Quality Commission
- Scottish Commission for the Regulation of Care
- Care Standards Inspectorate for Wales
- Northern Ireland Health and Personal Social Services Regulation and Improvement Authority
For the supply of nursing auxiliaries or care assistants to benefit from the concession, they must undertake some direct form of medical care, such as administering drugs or taking blood pressures, for the final patient. The concession does not apply to supplies of general care assistants who are:
- only involved in providing personal care such as catering, washing or dressing the patients
- working in care homes without nursing where they do not require supervision by health professionals to provide their services
Valuations for imported computer software
There are currently special rules for determining the value, for import VAT purposes, of computer software imported on carrier media. In particular, the value and tax treatment depends on whether the software is:
- Normalised i.e. standard packages available off the shelf which are taxed as goods; or
- Specific i.e. custom built (bespoke), which are taxed as a supply of services.
The value should be based on the price actually paid or payable for both the carrier medium and the data and instructions (i.e. the software) on it.
For customs valuation purposes, no distinction is made between normalised or specific software.
VAT is payable on imported software as follows:
- Normalised software – import VAT is due on the customs value of the software i.e. the total value of the carrier medium and the data and instructions (the software) on it, adjusted where appropriate in accordance with Section 21 (2) of the VAT Act 1994.
- Specific software – no import VAT is due. The total amount of the value of both software and carrier medium is treated as the consideration for the supply of services and is taxed accordingly within the member state concerned.
Comment:
See Section 7 of Public Notice 702 for more information about importing computer software.
