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VAT Memorandum of Understanding

VAT is a tax that is payable for goods and services and is relevant in the context of clinical academics because they provide 'services' to the NHS. See contracts and pay for more detail.  

However, the 'services' that clinical academics supply are exempt from VAT on condition that these are supplied in accordance with the VAT Memorandum of Understanding (MoU)  

The MoU endorses the principles of the Follett Report which means that there are very practical (as well as ethical) reasons for HEI's and NHS bodies' practices to correspond with those principles.

HEIs can safely invoice salary recharges to NHS organisations for the services of clinical academics without the need to add VAT.

VAT Memorandum of Understanding

The MoU applies equally to Wales and Scotland, although specific agreements have been reached in each country (see links for details) to reflect local arrangements. 

Northern Ireland, until recently, had a different contractual arrangement that meant there was no provision of services and therefore VAT did not apply. A specific MoU for Northern Ireland is currently in developement. Guidance on this process is available here.

 This page was last updated 24 February 2017