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NHS tax avoidance investigated

Major accountancy firms stand accused of helping NHS Trusts in England avoid paying tax, ITV News can reveal. HMRC are to investigate the use of tax avoidance schemes when NHS Trusts pay agency medics in order to escape paying VAT.

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Firms explain recruitment of locums in NHS Trusts

Financial services firms PricewaterhouseCoopers (PwC) and Liason released a statement in response to a report on ITV News regarding alleged tax avoidance among NHS Trusts:

STAFFflow is a service run jointly by PwC and Liaison that helps NHS trusts manage the recruitment of locums.

PwC provides consulting, pensions and tax advice. Liaison manages the day to day support and administration of the service.

Trusts using the service will engage locums directly, rather than use agency staff, with STAFFflow providing payroll and other HR support.

This direct contracting gives trusts greater visibility of and control of their recruitment costs - for example they can see exactly how much a locum is being paid and how much is going to the recruitment agency - and helps them manage their workforces more effectively.

There is a reduction in agency costs on which VAT is chargeable, as there is for any organisation employing someone directly rather than using agency staff.

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