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Nhs Equipment Management Scam

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Here's the deal: An NHS Trust procuring equipment can either:

1) buy medical equipment direct, then manage it themselves (maintenance, QA etc), or

2) buy a managed equipment service, where you get the equipment + refresh every 7 years + maintenance, QA etc.

Under route 1) the NHS pays VAT at 20% on the purchase price of the equipment. Under route 2) VAT is refunded in full.

Our Trust owns around £80M worth of equipment, so a 20% refund over 7 years is a great incentive to sign up to one of these private sector deals. The private sector bids can cost considerably more than the NHS equivalent but would still be cheaper to the Trust.

Trusts cannot legally set up their own equipment management services to provide equipment to themselves and reclaim VAT.

Sounds great, until you think through where the 20% saving comes from (lost revenue to the taxpayer) and where a large proportion of it finishes up (lining the coiffers of an equipment management company).

Is there an MP somewhere making a bucket out of this?

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Here's the deal: An NHS Trust procuring equipment can either:

1) buy medical equipment direct, then manage it themselves (maintenance, QA etc), or

2) buy a managed equipment service, where you get the equipment + refresh every 7 years + maintenance, QA etc.

Under route 1) the NHS pays VAT at 20% on the purchase price of the equipment. Under route 2) VAT is refunded in full.

Aren't NHS trusts allowed to register for VAT in order to reclaim input VAT ?

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Aren't NHS trusts allowed to register for VAT in order to reclaim input VAT ?

The finance dudes were all over this and couldn't find a loophole which would allow us to get out of it.

Pretty annoying considering that we've just analysed our service contracts on cancer treatment machines - contracts from private companies £700k per annum. Cost of staff + equipment + all on costs to provide a better maintenance programme (2 minute response time + 99% uptime) £500k per annum.

So the NHS service is still cheaper than the private sector equivalent even considering the 20% discount at the present time...

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Aren't NHS trusts allowed to register for VAT in order to reclaim input VAT ?

No. Input VAT paid by the NHS is irrecoverable. (edit) except in the case where the NHS undertakes private business (e.g. catering to staff).

And, of course, if the VAT is paid for purchasing a "managed service".

Edited by ChumpusRex

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Here's the deal: An NHS Trust procuring equipment can either:

1) buy medical equipment direct, then manage it themselves (maintenance, QA etc), or

2) buy a managed equipment service, where you get the equipment + refresh every 7 years + maintenance, QA etc.

Under route 1) the NHS pays VAT at 20% on the purchase price of the equipment. Under route 2) VAT is refunded in full.

Our Trust owns around £80M worth of equipment, so a 20% refund over 7 years is a great incentive to sign up to one of these private sector deals. The private sector bids can cost considerably more than the NHS equivalent but would still be cheaper to the Trust.

Trusts cannot legally set up their own equipment management services to provide equipment to themselves and reclaim VAT.

Sounds great, until you think through where the 20% saving comes from (lost revenue to the taxpayer) and where a large proportion of it finishes up (lining the coiffers of an equipment management company).

Is there an MP somewhere making a bucket out of this?

Probably, this VAT thing has always been so!!

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Here's the deal: An NHS Trust procuring equipment can either:

1) buy medical equipment direct, then manage it themselves (maintenance, QA etc), or

2) buy a managed equipment service, where you get the equipment + refresh every 7 years + maintenance, QA etc.

Under route 1) the NHS pays VAT at 20% on the purchase price of the equipment. Under route 2) VAT is refunded in full.

Our Trust owns around £80M worth of equipment, so a 20% refund over 7 years is a great incentive to sign up to one of these private sector deals. The private sector bids can cost considerably more than the NHS equivalent but would still be cheaper to the Trust.

Trusts cannot legally set up their own equipment management services to provide equipment to themselves and reclaim VAT.

Sounds great, until you think through where the 20% saving comes from (lost revenue to the taxpayer) and where a large proportion of it finishes up (lining the coiffers of an equipment management company).

Is there an MP somewhere making a bucket out of this?

Can they setup and manage for the next door trust? Promote a bit of teamwork and harmony?

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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