In December 2025, the UK’s VAT rules regarding temporary medical staff, specifically locum doctors, underwent a significant update following the Locum Doctors Tribunal decision. This ruling clarified the VAT liability for healthcare providers hiring locum doctors and how medical practices should handle VAT on temporary staff services. Many healthcare providers may have over-declared VAT on locum doctor services in the past. If you are one of them, it is crucial to understand how to reclaim over-declared VAT and avoid overpayment.
In this guide, we'll walk you through the process of reclaiming over-declared VAT, outline the steps you need to take, and highlight key considerations for medical professionals navigating these changes.
What the locum doctors tribunal decision means for healthcare practices
The Locum Doctors Tribunal decision centres around the VAT treatment of services provided by locum doctors to healthcare providers. Prior to this decision, there was significant confusion regarding whether VAT should be charged on the supply of locum doctors' services. The ruling clarified that locum doctor services provided to healthcare practices may be exempt from VAT under specific circumstances.
This clarification means that if you’ve been over-declaring VAT on locum doctor services in the past, you may now be eligible to reclaim that VAT. Medical practices and healthcare professionals need to act quickly to ensure compliance and reclaim overpayments.
How to reclaim over-declared VAT after the locum doctors tribunal decision
If your practice has over-declared VAT on locum doctor services, follow these steps to reclaim the overpaid VAT:
1. Review your VAT records
Start by reviewing your past VAT records for any over-declared VAT related to locum doctor services. Ensure that the invoices or payments made to locum agencies or doctors include VAT when they should not have. This step is crucial to understanding the extent of your VAT overpayment.
2. Determine the period of over-declaration
Once you’ve identified the over-declared VAT, you’ll need to determine the time period during which the VAT was overpaid. Generally, you can reclaim VAT for up to four years after the original payment. If your practice has been over-declaring VAT for several years, there could be a significant amount to reclaim.
3. Amend your VAT returns
The next step is to amend your VAT returns for the periods in which VAT was over-declared. You can do this by submitting a corrected VAT return to HMRC. This should include the corrected figures, removing the over-declared VAT from your VAT liability.
4. Submit a refund claim to HMRC
After amending your VAT returns, you’ll need to submit a formal claim to HMRC for a VAT refund. You can do this through HMRC’s online portal or by submitting a VAT refund claim form. Ensure that all documentation is in order to support your claim.
Learn more about VAT regulations and updates for healthcare businesses on our VAT page.
5. Keep detailed documentation
To support your claim, ensure that you have all the necessary documentation to prove the over-declared VAT. This may include invoices, payment records, and communications with locum agencies. Proper documentation will make your claim more efficient and reduce the likelihood of complications.
Key considerations when reclaiming over-declared VAT
While reclaiming VAT can be a straightforward process, there are several important things to keep in mind:
1. Time limits
HMRC typically allows businesses to reclaim VAT for up to four years after the date of the overpayment. However, this timeframe can vary, so it’s important to act quickly if you believe you’ve over-declared VAT.
2. Correct documentation
Ensure that all invoices, contracts, and any correspondence with locum agencies are correctly stored and organised. Missing or incomplete documentation could delay the refund process or lead to a rejection of your claim.
3. Consult an expert
Reclaiming VAT can be complex, especially in a sector like healthcare, where rules may differ based on the specific services being provided. It is advisable to consult with an accountant or VAT expert who specialises in the healthcare industry.
For more detailed guidance on reclaiming VAT, contact our experienced team at Kudos Accounting.
Common mistakes to avoid when reclaiming VAT
- Failing to Correct Your VAT Returns: Ensure that your VAT returns are updated before submitting a refund claim to avoid issues with HMRC.
- Missing Documentation: Incomplete or missing documents can delay the process or result in a rejected claim.
Not Consulting a Specialist: Reclaiming VAT in the healthcare sector can be tricky due to its unique requirements. Consulting an accountant with experience in healthcare VAT can save you time and money.
How long do I have to reclaim over-declared VAT after the locum doctors tribunal decision?
You typically have up to four years from the original date of the overpayment to reclaim VAT. However, it’s best to act sooner to ensure a smooth and efficient process.
Can I claim VAT for locum doctor services from more than four years ago?
HMRC usually allows you to reclaim VAT up to four years after the payment was made. However, there are some exceptions, so it's advisable to consult with a VAT expert to confirm your eligibility.
How can I ensure my VAT claim is accepted by HMRC?
To ensure your claim is accepted, make sure your VAT returns are amended correctly and all supporting documentation is in order. Submitting your claim promptly within the allowed time frame is also crucial.
What should I do if my VAT refund claim is rejected by HMRC?
If your VAT refund claim is rejected, you can appeal the decision. Consulting an accountant can help you understand the reasons for the rejection and resolve any issues effectively.
Conclusion
Reclaiming over-declared VAT can be an essential step in maintaining the financial health of your practice. The recent Locum Doctors Tribunal decision has clarified VAT rules, making it easier for healthcare providers to reclaim any overpaid VAT on locum services. Ensure you review your records, amend your VAT returns, and submit a formal claim to HMRC as soon as possible. If you’re unsure about the process or need help with your VAT claim, don’t hesitate to reach out to our experienced team of accountants at Kudos Accounting. We specialise in healthcare VAT, bookkeeping, and tax planning services for medical professionals across the UK.