Advice please - NHS Contracting (via agencies) and VAT

[Danglekt]

sorry - missed the fact there is an agent in the middle - I do all my work direct.

[TykeMerc]

sorry - missed the fact there is an agent in the middle - I do all my work direct.

Yup, that's a completely different matter.
To be fair I have made the assumption since he mentions an agency up front that there's one in the payment/supply chain, it is only an assumption.

[hiredhands]

Thanks everbody.

As has been pointed out, it appears to be an issue between the agency and the client - the agency is stating that the client was unaware that the 20% VAT can't be claimed back on non-clinical staff and that they haven't budgeted accordingly. I have already slightly adjusted my day rate based on this, but now they are saying they want to adjust it even more to allow for the client's oversight. I am not willing to drop my rate any further as the contract no longer becomes financially viable for me. I find it hard to believe that the trust have now raised this as an issue, as I know for a fact they have hired a number of non-clinical staff via agencies and must have factored this in. Wondering if the agency is involved in a bit of funny business to try and maximise its profit?

I haven't signed a contract with the agency, nor do they have my sole right of representation - I don't know if I can legally go direct to the client (in which case I would be able to invoice directly, including VAT, and they could claim back and make the deal affordable), or if I have to let this one slide and try and find another contract - it was the agency that introduced me to the position, but having signed nothing I don't know where this leaves me. It would be a real shame for me to miss out on this position, as it is working in an area I am personally very keen on and would love to get involved in.

Anyone else had similar troubles with agencies, and, if so, are there any solutions for working around this issue?

Thanks in advance!

hiredhands

N.B. I should also add that I spoke to several other recruiting companies today who state that the NHS clients they have ALWAYS claim back VAT on non-clinical staff: is this still the case, or has the legislation recently changed?

[NotAllThere]

... I have already slightly adjusted my day rate based on this, but now they are saying they want to adjust it even more to allow for the client's oversight. I am not willing to drop my rate any further as the contract no longer becomes financially viable for me. ...

It seems you have no choice then. You can't work a contract that's not financially viable. Stick to your guns, tell the agency you can't reduce your rate further, and see what happens.

If it all falls down, write to the person in the client who interviewed you, apologising for it not working out, and expressing a hope that if something else comes up (VATable!) they'll still consider you. Don't contact the client for any other reason. The purpose of such an email/letter is to ensure the agency aren't playing silly buggers.