From 1 May 2027, locum doctor supplies will be subject to VAT

What changes

The change concerns supplies of deputies for registered medical practitioners, meaning people who take on work covering for another doctor, known as locum work. Until now such supplies have been VAT-exempt. From 1 May 2027 they will be standard-rated.

The change relies on removing Item 5 of Group 7 of Schedule 9 to the VAT Act 1994. HMRC's brief (Revenue and Customs Brief 14 of 2026) explains how the change affects supplies of locum doctors and deputising services.

Deputising services unchanged

Deputising services will remain exempt from VAT. According to documents accompanying the change, HMRC wants to return to its earlier intended policy position. The exemption is to cover only medical care services, including deputising, and not the mere supply of staff.

Who is affected

According to the description of the change, it is likely to affect businesses in the medical employment services sector and those that receive these supplies, including NHS Trusts and private healthcare providers.

Claims for overdeclared VAT

The brief also points to where businesses can find information about claims for overdeclared VAT. This follows the First-tier Tribunal decision in Isle of Wight NHS Foundation Trust v HMRC [2025] UKFTT 1114 (TC).

Financial impact

HMRC estimates that the additional VAT receipts will rise from £85 million in 2027 to 2028 to £105 million in 2031 to 2032.

What this means for you

The change does not affect income tax, immigration rules or benefits. It does affect how supplies between businesses and hospitals or GP practices are taxed. The documents do not say how the change will affect the pay of locum doctors, including those from Poland. People interested can read the full brief on GOV.UK.