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A SIGNIFICANT UK tax tribunal decision has opened the door to VAT refunds for organisations involved in the supply of locum doctors and temporary medical staff. If your business has historically charged VAT on agency-supplied locums — or if your NHS or private healthcare organisation has absorbed those costs — this is a rare opportunity to revisit past treatment and potentially recover material sums.

HMRC has now confirmed it will not appeal the First-tier Tribunal (FTT) decision and is issuing revised guidance. More importantly, HMRC has also set out the practical route for suppliers to reclaim overpaid VAT, potentially going back up to four years.

In today’s Shipleys Tax brief, we highlight a significant VAT tribunal decision that may allow medical staffing agencies and healthcare providers to reclaim VAT previously charged on locum doctors.

What changed — and why it matters

The dispute arose after the Isle of Wight NHS Trust challenged HMRC’s longstanding view that VAT exemption did not apply to the supply of temporary medical practitioners through agencies. HMRC’s historic position had been that the relevant exemption was limited to traditional “deputising” services such as GP out-of-hours arrangements.

…we highlight a significant VAT tribunal decision that may allow medical staffing agencies and healthcare providers to reclaim VAT previously charged on locum doctors.

The tribunal took a different view. It considered Item 5, Group 7, Schedule 9 of the VAT Act 1994, which exempts “the provision of a deputy” for a registered medical practitioner, and found that HMRC’s interpretation had been too narrow. In practical terms, the tribunal concluded that the exemption can apply to agency-supplied locum doctors, not just to classic deputising models.

That’s a big deal because it directly affects how agencies have treated VAT on locum doctor supplies — and it changes the economics for NHS bodies and private providers who could not fully recover VAT as input tax.

HMRC’s position: no appeal, claims process confirmed

Following the decision, HMRC has said it will not appeal and has indicated that it intends to revise its guidance accordingly. HMRC has also explained how eligible suppliers can correct past VAT treatment. In broad terms, claims can be made by adjusting prior VAT returns or by making a formal repayment claim for overpaid VAT (subject to strict rules and time limits). HMRC has even created a dedicated email channel for submissions.

While HMRC has not gone out of its way to “endorse” the tribunal’s reasoning, the practical message is clear: there is now a route to recover VAT that may previously have been charged on locum doctor supplies.

Who actually benefits — and why it’s commercially sensitive

This is where the story gets interesting, and why a careful strategy matters.

In many cases, NHS bodies and private hospitals may feel the financial pain, but they are not always the party that can make the VAT reclaim. The VAT would typically have been declared by the agency, meaning it is usually the agency that must submit any claim or adjustment. That creates immediate commercial and contractual questions: if an agency reclaims VAT, what happens to pricing, historic invoicing and rebates? And how do parties handle recovery where contracts didn’t anticipate a change like this?

HMRC has said it will not appeal and has indicated that it intends to revise its guidance accordingly.

There is also a technical issue that can’t be ignored: for agencies, changing VAT treatment can affect partial exemption calculations. In short, a reclaim is not always “free money”. Some agencies may find the VAT recovery is reduced after partial exemption adjustments are factored in, or that wider VAT positions need to be reworked.

This is why specialist commentators have described HMRC’s revised stance as more than a minor tweak — it has the potential to unlock refunds, but also to trigger knock-on adjustments across the supply chain.

Should you act now?

If you are a medical recruitment agency, an NHS trust, or a private healthcare provider that routinely uses locum doctors, it is worth exploring this now — not at year end. These claims are time-limited, evidence-driven and often require a structured approach to documentation, contracts and VAT mechanics.

Just as importantly, HMRC guidance is still evolving. The strongest claims tend to be the ones that are properly evidenced, correctly scoped and aligned with the commercial reality of how supplies were made.

How Shipleys Tax can help

Shipleys Tax advises healthcare organisations and medical staffing suppliers on complex VAT issues, including eligibility reviews, quantification, claim strategy, and the knock-on effects on partial exemption and contracts. We focus on building claims that are commercially sensible and technically robust — and we manage the process so you don’t end up creating a second problem while trying to fix the first.

Next step: a confidential VAT review

If you have charged VAT on locum doctor supplies, or absorbed VAT costs you couldn’t recover, now is the time to check your position and quantify the opportunity.

Speak to Shipleys Tax for a confidential review and we’ll assess whether a reclaim is available, estimate the size of the opportunity, and map the safest route forward.

For further assistance or queries, please contact:

Leeds: 0113 320 9284      Sheffield: 0114 272 4984

Email: info@shipleystax.com

This article is for general information only and does not constitute professional advice. Shipleys Tax does not offer free advice by email or phone. Always seek tailored advice before taking action.

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Companies vs LLPs | FICs vs Direct Ownership | EOTs vs Trade Sale | Holding Companies vs Simple Groups

AS UK TAX landscape tightens and reliefs narrow, the most powerful tax and wealth outcomes are no longer achieved through last-minute planning. Instead, they are driven by how a business or investment is owned, structured and positioned for the future.

Whether you are growing a trading company, building a property portfolio, planning succession, or preparing for an eventual exit, structure is strategy. The wrong structure can quietly erode value, restrict options and expose you to unnecessary tax. The right one can support growth, unlock funding, and protect family wealth across generations.

In today’s Shipleys Tax article we take a broad look at some key structural choices facing UK business owners today — and why reviewing them early has never been more important.

Company vs LLP: Certainty or Flexibility?

One of the most common structural decisions is whether to operate through a limited company or a limited liability partnership (LLP).

Whether you are growing a trading company, building a property portfolio, planning succession, or preparing for an eventual exit, structure is strategy.

Limited companies offer:

• Clear separation between business profits and personal tax
• Greater certainty on tax rates and profit retention
• Access to share-based incentives such as EMI
• Cleaner exit routes, particularly for trade sales or private equity

LLPs, by contrast, provide:

• Flexible profit allocation
• Transparency for tax purposes
• Familiarity in professional and advisory sectors

However, LLPs are increasingly under scrutiny, particularly around employer NIC exposure, disguised employment and partner status. For many growing firms, the historic advantages of LLPs are narrowing, while companies provide a more robust and future-proof platform.

The real question is no longer “which structure saves tax today?”, but which structure still works as the business evolves.

Family Investment Companies (FICs) vs Direct Ownership

With inheritance tax receipts rising and nil-rate bands frozen, families holding valuable trading companies or property portfolios are increasingly re-examining how assets are owned.

Direct ownership is simple, but it exposes future growth to inheritance tax and limits succession flexibility.

Family Investment Companies (FICs), when properly structured, can:

• Retain control through voting shares
• Shift future growth to the next generation
• Support long-term succession planning without giving assets away outright
• Integrate with trusts and wider estate planning

FICs are not a “one-size-fits-all” solution. Poorly designed share rights, funding structures or governance can create unintended tax consequences or family tension. Used correctly, however, they remain one of the most effective long-term planning tools available.

FICs are not all about avoiding tax today — they are about controlling who bears tax tomorrow.

Employee Ownership Trusts (EOTs) vs Trade Sales

For founders considering an exit, the choice between an Employee Ownership Trust and a trade sale is as much about values as it is about numbers.

EOTs can offer:

• A tax-efficient exit route
• Business continuity
• Protection of culture and legacy

But they also involve:

• Deferred consideration
• Ongoing governance obligations
• Reduced flexibility following recent changes to CGT relief

FICs are not all about avoiding tax today — they are about controlling who bears tax tomorrow.

Trade sales, by contrast, often deliver:

• Higher upfront value
• Cleaner exits
• Greater certainty for founders

Increasingly, we see hybrid solutions — partial EOTs, management buy-outs, or staged exits — designed to balance tax efficiency, funding, and control.

The best exit is rarely binary — and almost never last-minute.

Holding Companies vs Simple Group Structures

As businesses grow, the question often arises: should you introduce a holding company?

A well-designed group structure can:

• Ring-fence risk between activities
• Enable tax-efficient dividend flows
• Support acquisitions without personal extraction
• Create flexibility for future demergers or partial sales

However, unnecessary complexity brings administrative burden and HMRC attention. The key is purpose-led structuring — building only what supports commercial reality.

Good group structures look simple on paper and powerful in practice.

Common Structural Mistakes

Across sectors, we frequently see:

• Structures copied from peers without regard to risk profile
• LLPs or sole ownership retained long after circumstances change
• Succession and exit planning deferred until value is already crystallising
• Tax planning pursued without a clear commercial narrative

These mistakes rarely fail immediately — they simply become expensive over time.

The Shipleys Tax View

Optimising structure is not about chasing loopholes or short-term tax savings. It is about aligning ownership with where the business, family or investment strategy is heading.

Growth, external capital, succession and exit all pull in different directions. The right structure reconciles them before tax becomes a constraint.

The most expensive tax planning is the kind done too late.

Next Steps

If your business or investment structure has not been reviewed in the last three to five years, there is a strong chance it no longer reflects:

• The current tax environment
• Your growth ambitions
• Your succession or exit plans

Shipleys Tax works with owner-managers, families and boards to stress-test structures against future scenarios — before decisions become irreversible.

For further assistance or queries, please contact:

Leeds: 0113 320 9284     Sheffield: 0114 272 4984       

Email: info@shipleystax.com

This article is for general information only and does not constitute professional advice. Shipleys Tax does not offer free advice by email or phone. Always seek tailored advice before taking action.

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IN THE PAST decade, the UK property market has quietly undergone a structural revolution. What began as a tax-driven shift among higher-rate landlords has now become a mainstream trend — with over 70% of new buy-to-lets purchased through companies, and a growing number of investors treating their portfolios as businesses rather than side investments.

The reasons are clear. Frozen tax thresholds, rising mortgage rates, and the unpopular Section 24 restriction on mortgage interest relief have all squeezed traditional landlords, while larger and more professional investors — including overseas buyers and family offices — have quietly moved towards corporate ownership. This allows for lower tax rates, full deductibility of finance costs, and greater flexibility in reinvestment and succession planning.

At the same time, institutional capital continues to pour into the UK’s build-to-rent sector, with pension funds, private equity, and sovereign wealth investors acquiring or developing rental stock at scale. The message is unmistakable: whether you’re a single investor or managing a multi-million-pound portfolio, the property landscape now rewards structure, strategy, and scale.

…over 70% of new buy-to-lets are purchased through companies, and a growing number of investors treating their portfolios as businesses rather than side investments.

However, incorporating property holdings is not a straight forward exercise. The potential tax benefits — from Corporation Tax savings to mortgage interest relief and succession planning — must be balanced against complex rules on Capital Gains Tax (CGT), Stamp Duty Land Tax (SDLT), and legislative anti-avoidance. Done correctly, it can transform how you manage and grow your portfolio. Done wrong, it can trigger large unexpected tax bills and HMRC scrutiny.

In today’s Shipleys Tax insight, we take a closer look at when, how, and whether property investors, landlords, and developers — in the UK and abroad — should consider incorporating their portfolios, and how to structure the move in a way that is commercially robust, compliant, and future-proof.

The shifting sands…

UK investment property is increasingly held through companies, not personal names. Various datasets show the direction of travel:

• 70–75% of new buy-to-let purchases now go into companies, and the stock of company-owned BTLs keeps rising. 
• 2025 has seen a surge in newly incorporated BTL companies (c. 67k expected), including more international landlords using UK companies. 
• On the institutional side, Build-to-Rent continues to scale: 2025 updates show rising capital deployment and a deepening pipeline of professionally managed rental homes — i.e. corporate ownership at scale. 

Why this matters: whether you own five units or fifty, the market (and lenders) increasingly assumes a corporate wrapper. That doesn’t mean incorporation is always right—but it does mean you should evaluate it properly.

Why more investors are going limited – summary points

• Tax rate arbitrage (corporation vs personal): Company profits are taxed at 19–25%, versus personal rates up to 45% for landlords. 
• Finance cost deductibility: Companies can still deduct 100% of mortgage interest (unlike Section 24-restricted individuals). 

Company profits are taxed at 19–25%, versus personal rates up to 45% for landlords.

• Reinvestment & scale: Retaining profits inside the company can make it easier to fund capex and acquisitions (and often plays better with lenders as your portfolio grows). Industry evidence shows professional/portfolio and institutional investors are leaning this way. 
• Succession options: With the right share design, you can plan control, income and eventual handover far more neatly than with personally-owned bricks and mortar.

Institutions are not doing this by accident. The rise of professionally managed rental (BTR/single-family) is a clear signal that corporate ownership is the default for scalable portfolios. 

Property tripwires

Moving assets from you to your company can trigger tax and lending events. Common pitfalls we regularly help clients avoid:

• CGT at market value on transfer unless qualifying reliefs can be applied.
• SDLT on the company’s acquisition price, including surcharges — partnership routes and genuine business status matter.

Moving assets from you to your company can trigger tax and lending events

• Mortgage reset risk: lenders may re-price or require a new facility when title changes.
• Anti-abuse scrutiny: “form-over-substance” restructures invite HMRC challenge.

These can often be managed with commercially robust planning—but only if mapped before you pull the trigger.

Where Shipleys Tax advice fits

Shipleys Tax act for landlords, developers and cross-border investors who want the benefits of a company without the nasty pitfalls:

• Feasibility modelling: side-by-side projections (personal vs company) so you can see the real after-tax outcome.
• Reliefs & route selection: assessing whether you’re a genuine property business, if partnership routes make sense, and how to minimise/mitigate CGT/SDLT on transfer.
• Banking & debt coordination: working with your broker/lender so finance aligns with the structure (and the timetable).
• Succession & wealth planning: company share design, Family Investment Company (FIC) options, and clean governance for future exits.
• Ongoing compliance: accounts, corporation tax, VAT where relevant—and steady optimisation as rules shift.

Conclusion

Incorporating your property portfolio isn’t a simple formula — but for many serious investors, it has become the foundation of modern, scalable property investment. A company structure can open the door to lower tax rates, full finance deductibility, reinvestment flexibility, and far more controlled succession planning.

However, success lies not in the decision but in the execution. The process must be commercially justified, carefully modelled, and compliant with HMRC’s rules on reliefs and anti-avoidance. A poorly timed or poorly structured incorporation can easily erode the very benefits it was meant to deliver.

At Shipleys Tax, we specialise in helping landlords and investors navigate that fine line — turning complex legislation into practical, tax-efficient strategies.

For further assistance or queries, please contact:

Sheffield: 0114 303 7076                        Leeds: 0113 320 9284               Manchester: 0161 850 1655 

Email: info@shipleystax.com

Please note that Shipleys Tax do not give free advice by email or telephone. The content of this article is for general guidance only and should not be considered as tax or professional advice. Always consult with a qualified professional before taking action.

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