Clients come to CRSTAX for specialist tax advice, but the support they receive is shaped by much more than the technical answer alone. Behind every piece of advice is a team of people who bring together experience, judgement, attention to detail, and a practical understanding of the pressures facing NHS bodies, healthcare organisations, and the wider public sector. 

Throughout September, we will be introducing more of the people behind the growing CRSTAX team, sharing who they are, what they do and the role they play in supporting clients. 

Our clients know us for clear, practical advice across areas such as NHS VAT advisory services, VAT recovery reviews, Contracted-Out Services, capital programme VAT support, employment taxes, HMRC queries, compliance reviews, training and wider project support. That advice is only possible because of the people delivering it: from senior specialists with decades of public sector and healthcare tax experience to consultants working closely with clients day-to-day, technical reviewers helping with the more complex points, and the teams behind the scenes keeping everything running smoothly. 

This team Spotlight series is a chance to introduce colleagues our clients might already know, as well as those who often work behind the scenes to ensure the right support is in place. 

What to expect

We will begin by introducing our VAT consultants and delivery specialists, including Hanna Woodfall, Maria Southall, Sam Howcroft, Mike Williams and Michael Mitchell.

This team is at the heart of day-to-day client support, helping NHS bodies and healthcare organisations navigate practical VAT issues, review transactions, analyse data, support compliance and manage projects. From responding to queries and identifying VAT recovery opportunities to delivering reviews and providing analytical insight, they play a key role in ensuring clients receive advice that is clear, practical and grounded in real sector experience.

The following week, we will focus on our technical VAT specialists, including Chris Silk, Diana Glasspool and Henry Hoad.

Our technical VAT specialists provide expert support across the wider team, helping colleagues and clients manage complex or unusual VAT issues. They act as trusted advisers, reviewers and mentors, sharing their knowledge and experience to support the delivery of clear, practical and technically robust advice.

Their expertise is particularly valuable where legislation is complex, HMRC guidance is evolving, or a client needs additional assurance around a significant decision. Working alongside the wider VAT team, they provide specialist input, challenge and technical review, helping ensure clients receive advice that is both technically sound and practical to apply.

We will then introduce the CRSTAX management and leadership team, including Managing Partner Nick Burrows, Director June Wright and Associate Director Christopher Woodfall.

Together, they help coordinate client delivery across CRSTAX, combining strategic oversight, technical expertise, operational leadership and project management experience. Working closely with clients and colleagues, they help ensure projects remain responsive, commercially aware and focused on delivering practical outcomes.

As CRSTAX’s NHS Technical Lead, Christopher Woodfall plays a key role in maintaining the technical quality and consistency of advice provided across the business. Supporting colleagues on complex matters and helping shape technical standards across client work, he helps ensure clients receive advice that is robust, practical and defensible.

Alongside this, the leadership team guides the development of services, supports client relationships and helps ensure the wider team has the tools, knowledge and support needed to continue delivering a high standard of service.

Later in September, we will introduce our Employment Taxes team, including Partners Angela Ferguson and John Harling, as well as Consultant Alex Gardner.

Employment taxes are a major area of risk and responsibility for NHS and public sector employers, covering PAYE, NIC, expenses and benefits, IR35, CIS, salary sacrifice arrangements, payrolling benefits, HMRC enquiries and wider compliance matters. This team helps organisations understand their obligations, identify risks early and make informed decisions with confidence.

We will close the month by introducing some of the people working behind the scenes across marketing, finance and operations.

CRSTAX client support extends far beyond the consultants they see in meetings or speak to on calls. Behind every event, training course, proposal, invoice, client update, booking process and internal project is a wider group of colleagues helping to keep things moving and ensuring the client experience remains smooth, professional and well supported.

CRSTAX is the specialist NHS tax advisory firm formerly known as CRS VAT. 

The name changed to CRSTAX to better reflect the breadth of tax support we provide to NHS organisations. While VAT remains a core part of our work, our specialist team also supports NHS clients across Employment Taxes, Corporate Tax and a wide range of other technical tax matters. 

So, if you have searched for CRS Tax, CRS VAT or the former CRS VAT team, you have found the right place. 

Why did CRS VAT become CRSTAX? 

CRS VAT built its reputation through specialist VAT advice for the NHS. 

As the needs of our clients developed, so did the range of support provided by our team. Our work now extends well beyond VAT, including specialist advice across Employment Taxes, Corporate Tax and other areas of NHS taxation. 

The move from CRS VAT to CRSTAX reflects that broader tax expertise while retaining the specialist NHS focus our clients know us for. 

The same specialist NHS tax expertise 

The change of name did not change our focus as CRSTAX continues to provide specialist tax support to NHS organisations, drawing on extensive experience of the issues that arise across the health sector. 

Our team supports NHS clients with areas including: 

• VAT compliance and recovery 

• NHS VAT advisory work 

• Employment Taxes 

• Corporate Tax 

• HMRC enquiries and reviews 

• Contract and transaction advice 

• Capital projects 

• technical tax queries 

• tailored NHS tax training 

Our specialists include professionals with backgrounds in the global accounting profession and HM Revenue & Customs, combining technical tax expertise with practical knowledge of the NHS. 

Specialist tax support for NHS organisations 

Tax issues within the NHS can be highly specific. Funding arrangements, contractual structures, VAT recovery rules, workforce issues and HMRC requirements can all create questions that require specialist sector knowledge. 

CRSTAX works with NHS organisations to help identify tax risks, improve compliance, protect tax recovery and resolve complex technical issues. 

Whether you previously worked with CRS VAT, have searched online for CRS Tax, or are coming to CRSTAX for the first time, our team can help. 

Frequently asked questions 

Is CRS VAT now CRSTAX? 

Yes. CRS VAT changed its name to CRSTAX to reflect the wider range of tax services provided by the business to NHS organisations. 

Is CRS Tax the same as CRSTAX? 

If you have searched for CRS Tax, you are likely looking for CRSTAX. CRSTAX is the current name of the specialist NHS tax advisory firm formerly known as CRS VAT. 

Does CRSTAX still provide NHS VAT advice? 

Yes. VAT remains a core part of CRSTAX’s work. Our specialist team supports NHS organisations with VAT compliance, recovery, advisory matters, capital projects, contracts and other complex VAT issues. 

What other tax services does CRSTAX provide? 

Alongside VAT, CRSTAX supports NHS organisations with Employment Taxes, Corporate Tax and other specialist tax matters. 

Is the CRS VAT team still part of CRSTAX? 

Yes. The move from CRS VAT to CRSTAX was a change of brand that reflects the broader tax services provided to NHS clients. 

Speak to the CRSTAX team 

If you need support with an NHS tax issue, or previously worked with CRS VAT and would like to reconnect with the team, please get in touch. 

CRSTAX – specialist tax advisers to the NHS.

CRSTAX took part in the Public Sector Challenge London Bridges Walk 2026 alongside teammates from PSTAX, fundraising for national charities including the British Heart Foundation and Cancer Research UK. Colleagues across the wider group, including S3TAX, helped push the fundraising and support the team around the event.

Taking part in the London Bridges Walk was a great way for us to back a public sector event and raise money for charities with a direct connection to the work the NHS does every day. It also reflects the mindset we bring to our client work. NHS finance teams are expected to deliver assurance, keep services running, and protect scarce resources, often with limited time and capacity. VAT and employment taxes sit right in the middle of that. When the position is clear, evidenced, and applied consistently, it supports better decisions and reduces avoidable cost. When it is not, it can create risk, rework, and pressure at exactly the wrong moment.

CRSTAX works exclusively with the NHS, supporting finance teams with VAT and employment taxes in a way that is practical, clear, and easy to apply in day-to-day decision making. That includes helping organisations get confidence in their VAT recovery position, understanding where risk sits, and making sure processes and evidence stand up when reviewed. It also includes targeted reviews that help identify opportunities, address areas of uncertainty, and reduce the chance of avoidable costs landing later.

The same principles that uphold good NHS finance sit behind how we work: stewardship of public money, accountability, transparency, and decisions that can be explained and evidenced. Supporting the Public Sector Challenge fits naturally with that, as well as giving us the chance to raise money for charities with a direct link to health outcomes and the lives of the people the NHS supports.

Thank you to everyone who donated, shared the page, sent messages, or encouraged the team. Every contribution helps. If you would like to support the fundraising, you can donate here:
https://www.givewheel.com/fundraising/12200/pstaxs3taxcrstax-public-sector-challenge-london-br/

NHS VAT and employment tax support
Practical advice and support for NHS finance teams, covering day-to-day queries, risk areas, and complex projects.

Targeted reviews and assurance work
Reviews designed to test positions, strengthen evidence, identify opportunities, and reduce the risk of issues arising later.

Following the Isle of Wight NHS Trust case, HMRC has issued updated guidance confirming that supplies of agency locum doctors are VAT-exempt. HMRC has confirmed it will not be appealing the decision.

What This Means for NHS Organisations

This ruling creates a significant opportunity for NHS bodies to recover VAT overpaid on agency locum costs. Suppliers can reclaim VAT paid over the last four years, subject to adjustments for partial exemption and unjust enrichment provisions.

NHS organisations should:

• Review historic VAT charged on locum doctor spend within the four-year cap
• Engage with suppliers to discuss how both parties can benefit from the VAT recovery
• Understand the practical implications of the new guidance for future procurement

How CRSTAX Can Help

We’re supporting NHS organisations to understand the implications of this guidance and to manage the VAT recovery process effectively. Our team can help you identify potential recoveries, liaise with suppliers, and ensure compliance with HMRC’s requirements.

Get in Touch

If you’d like to discuss how this affects your organisation or explore potential VAT recovery opportunities, contact our team today.

A Treasury agreement will allow the NHS to overspend this year to meet the cost of up to 18,000 management and administrative redundancies. The announcement follows months of discussion on how to manage a one-off bill of around £1bn as NHS England is brought into the Department of Health and Social Care and layers of management are removed.

The government has been clear. No new funding is being added beyond the current spending review settlement. NHS bodies are expected to restructure now, reduce bureaucracy, and return the savings in future years.

What the restructuring means for NHS finance and workforce teams

Workforce reduction on this scale affects multiple operational areas:

• Organisational change and potential transfers of function
• Treatment of redundancy and compensation payments
• VAT and tax implications where functions move between bodies
• Record-keeping for internal audit and external scrutiny
• Cost centre reallocation and budget planning

Finance teams will need to ensure tax treatment is correct from the outset. Errors in redundancy payments, payroll adjustments, or VAT treatment of transformation activity can lead to avoidable cost and future challenge.

Tax considerations NHS bodies should consider

CRSTAX supports NHS organisations daily with restructuring and operational change. Key areas that frequently arise include:

• VAT recovery on transformation and programme costs
• Treatment of consultancy and service redesign under the Contracted-Out Services rules
• PAYE and National Insurance implications of severance arrangements
• Potential CIS exposure linked to estates and digital programmes
• VAT issues when management functions or assets move between NHS bodies

Clear documentation and early technical review reduce uncertainty when timelines are tight.

Focus on front-line delivery will continue

The Secretary of State has highlighted a commitment to reduce layers of management and redirect funds toward patient care. As savings begin, scrutiny of spending, tax compliance, and governance is likely to increase, not decrease.

NHS teams planning restructures or redesign work should ensure tax considerations are built into the project rather than checked at the end.

CRSTAX will continue providing updates as more detail emerges. For support with VAT, employment taxes, or restructuring consequences, please contact our CRSTAX NHS specialists.

£2.65m VAT recovered from reviews for a large NHS Trust 

CRSTAX led a focused VAT recovery programme for a large London NHS Trust in 2025. Working to a monthly timetable, we reviewed recent spend against COS headings, improved partial exemption position, and additional overhead VAT treatment. The work delivered £2,040,599 from retrospective COS checks, £204,222 from partial exemption reductions, and £406,920 from additional overhead input tax. We also set defensible VAT recovery percentages for 38 capital schemes, giving project teams a clear standard to follow. 

The brief 

We were asked to increase VAT recovery without slowing month-end. Priorities were to identify missed COS, calculate the yearly partial exemption position, and document decisions so Finance could claim in the next VAT return with confidence. 

How we worked 

Retrospective COS reviews 

Each month, we looked back at the latest available spend and tested high-value suppliers, cost codes, and line descriptions against the COS headings. For qualifying items, we prepared short evidence notes so the Trust could confidently recover VAT with a consultant-backed position. 

Partial exemption 

We determine partial exemption positions through a structured analysis of taxable vs. exempt activities and related input VAT, applying the optimal partial exemption method for each project. This gives a robust, defensible recovery percentage and improved VAT efficiency. 

Overhead input tax 

We also identified additional overhead input tax, reviewing indirect cost centres, and reallocating expenditure. This ensured the partial exemption calculation captured the full scope of recoverable costs and provided additional recovery beyond the standard percentages. 

Capital schemes 

For 38 projects, we agreed practical VAT recovery percentages. This supports project teams and allows VAT to be reinvested into tight budgets at the point of inception. 

Results from 2024/25 

• £2,040,600 recovered from retrospective COS reviews 

• £204,223 improvement in the partial exemption position 

• £406,920 additional overhead input tax recovery 

• 38 capital schemes with agreed VAT recovery percentages 

Beyond the totals, the Trust now has a repeatable approach that helps cash flow with VAT being recovered via monthly VAT returns. 

What this means for NHS finance teams 

• Retrospective COS checks convert past spend into current year value 

• Reducing the partial exemption position reduces liability vs HMRC methods, while providing additional overhead recovery. 

• Clear VAT positions on capital projects save time for Finance, Procurement and Estates 

Talk to the CRSTAX NHS VAT team 

If you want a straightforward view of where additional VAT recovery may exist, contact us today to discuss options that fit your Trust.    

Announcements with potential VAT implications for the NHS

The government confirmed its intention to establish up to 250 neighbourhood health centres across England, with 120 expected to be operational by 2030. Funding will be provided through a new on‑balance sheet public‑private partnership (PPP) model, details of which are to follow. Ministers have indicated that lessons from 25 years of PFI contracts will inform the design of this structure.

Discussions are ongoing over how the neighbourhood health centres will operate, but as these arrangements will involve the NHS, Local Authorities, the Voluntary, Community, and Social Enterprise sector, and other third parties working together, an early approach to reviewing the agreed structure could lead to VAT efficiencies in the model due to the varying VAT refund schemes across those involved.

A further £300 million of capital funding has been allocated to NHS technology, with the stated aim of deploying new digital tools to support staff and improve productivity. HMRC has recently updated its interpretation of COS Heading 14 in relation to computer services. It will therefore be important to scrutinise new contracts carefully to confirm whether VAT recovery is available, and to ensure that HMRC’s evidential requirements are met in full.

CRSTAX will be contacting clients shortly with further information about HMRC’s new interpretation of COS Heading 14.

Announcements with potential Employment Tax implications for the NHS

National Living/Minimum Wage rates to increase

The National Living Wage is the minimum amount a worker is entitled to be paid if they are 21 or over. It is currently set at £12.21 an hour and is set to rise by 4.1% to £12.71 an hour from next April.

The National Minimum Wage is the minimum amount for workers aged between school-leaving age (turning 16) and 20. For those aged 18 to 20 the hourly rate is £10 and this will rise by 8.5% to £10.85 an hour. And for those under 18 it’s £7.55 and will rise by 6% to £8 an hour.

If you’re an apprentice and are under 19 or in the first year of your apprenticeship, you receive a rate of at least £7.55 an hour. As above, it will increase by 6% to £8 an hour.

These changes were based on the recommendations of the Low Pay Commission, which is an independent body created to advise the government on changes to the Minimum and Living wage.

In August, the commission projected increasing the Living Wage to £12.71 an hour would ensure it didn’t fall below two-thirds of median earnings.

HMRC/Fair Work Agency – NMW enforcement

The Budget reinforced government commitment to ensuring fair pay and stronger protections for workers, which aligns with the launch of the new Fair Work Agency (FWA) in April 2026. A core priority for the FWA will be enforcing National Minimum Wage compliance, ensuring that all workers receive at least the legally mandated pay. This focus complements the Budget’s measures to raise the minimum wage and improve living standards, giving workers confidence that wage rules will be rigorously applied.

To achieve this, the FWA will establish a dedicated “hidden economy” team to tackle sectors with high rates of wage underpayment and labour exploitation, starting with hand car washes and expanding to other high-risk industries. The agency will follow up on complaints from workers, investigate employers who fail to comply with NMW requirements, and take robust enforcement action, including fines and public naming of offenders.

The FWA will also work closely with trade unions and local business groups to gather intelligence on exploitative practices, enabling proactive enforcement. Additionally, the government will explore using the Companies Directors Disqualification Act 1986 to bar directors whose repeated breaches demonstrate they are unfit to manage companies. By summer 2026, the FWA aims to eliminate the backlog of cases inherited from the previous administration, and all future breaches, including NMW violations, will be publicly reported within a year of case closure.

Together, these measures signal a strengthened enforcement regime designed to ensure that all workers are paid fairly and that employers who break wage laws face swift and visible consequences.

Income Tax & NIC thresholds frozen from April 2028 to April 2031

The Autumn Budget confirmed that Income Tax and National Insurance thresholds will remain frozen until April 2031.

• Personal Allowance stays at £12,570
• Higher-rate threshold remains at £50,270
• The additional rate threshold remains at £125,140 from April 2028 to April 2031
• Employer NIC thresholds also frozen

This extended freeze means more people will move into higher tax bands as wages rise—a phenomenon known as fiscal drag. HM Treasury estimates this will bring hundreds of thousands more taxpayers into higher rates over the coming years, increasing overall tax receipts without changing headline rates.

The Personal Allowance threshold applies UK-wide. The higher rate threshold for non-savings, dividend and property income and for property income will apply to taxpayers in England, Wales and Northern Ireland, and for savings and dividend income it will apply UK-wide. This will be legislated for in Finance Bill 2025-26.

Tax-Free Reimbursements for Health and Homeworking Costs

From 6 April 2026, employers will be able to reimburse employees for certain costs—such as eye tests, flu vaccinations, and home-working equipment—without creating a taxable benefit.

This is something we have discussed at several of our forums and currently, these items are only exempt if provided directly by the employer (e.g., via vouchers or arranged services). This change simplifies administration and supports flexible working and employee wellbeing, while removing the need for complex benefit reporting.

However, the deduction for homeworking expenses where the costs are not borne/reimbursed by an employer will be removed with effect from April 2026.

Mileage-based charge on electric and plug-in cars

A new mileage-based charge called the Electric Vehicle Excise Duty (eVED) will be levied alongside the existing Vehicle Excise Duty on electric and plug-in hybrid cars from April 2028, of 3p per mile for Electric and 1.5p for Hybrids.

The consultation issued today will provide further detail on how eVED will work and seeks views on its implementation. It proposes that drivers will provide an estimate at the start of the year or point of purchase, to be ratified as part of the annual MOT process. Where a car does not require an MOT there is suggestion that they may need to attend a separate check when the car reaches one and then two years old, perhaps as part of a routine maintenance and servicing regime.

It has not been made clear as yet how this will interface with existing approaches to company car taxation. It is possible that, as with the VED charge for other types of cars, it will not give rise to a separate benefit for company car drivers. But as this charge will vary based on travel levels employers will need to consider their approach where costs are increased by employees’ private travel, or how they might plan for a fleet incurring high business mileage.

Benefit in Kind easement for plug-in hybrid electric vehicles (PHEV)

There will be a temporary tax easement to prevent the Benefit in Kind (BIK) value increasing due to new emissions standards. To apply from 1 January 2025 to April 2028. During the easement period, the CO2 emission figure for those PHEVs will be deemed to be a nominal figure of 1g/km for the purposes of the BIK charge rather than the CO2 figure on the registration document.

This will have the effect of reducing the value of the benefit-in-kind charge that applies.

Delay to proposed changes to Employee Car Ownership Schemes

In a welcome development, planned changes to bring Employee Car Ownership Schemes (ECOS) into the scope of company car taxation have been significantly delayed until 2030/31, with transitional arrangements until April 2031.

PAYE changes for the Umbrella Market

No changes have been announced to the forthcoming introduction of joint and several liability for PAYE for users of umbrella companies and other employment businesses. As such, we are now expecting that these rules will be implemented from April 2026 with no significant changes to the previously announced proposals.

For end clients, there are scenarios whereby joint and several liability could arise and we are recommending that all users of labour undertake a review of possible exposure in advance of the rules coming in by carrying out a full due diligence of their labour supply chain.

Mandatory payrolling of benefits – revised guidance issued

HMRC has published a new manual setting out interim guidance and draft legislation for the upcoming mandatory payrolling of benefits in kind (BIK) and expenses. This manual is not final—it will be updated and amended as HMRC clarifies guidance and receives feedback during the consultation process. The aim is to help employers, payroll providers, and software developers prepare for the transition to real-time reporting.  HMRC aims to publish final drafts of all legislation by Autumn 2026.

Key Features of the Draft Guidance:

• A section on how to get ready for mandatory payrolling
• How to report a benefit in real time
• What happens when the full amount of tax cannot be collected in the pay period or tax year
• The new FPS data fields to capture benefit details and Class 1A NICs
• Guidance on complex scenarios (mid-year changes, leavers, starters)
• Penalties and interest charges

In the ‘How to report a benefit in kind in real time’ the guidance states –

“It is your responsibility to ensure that employees are paying the correct or as close to the correct amount of tax as possible on the benefits in kind provided.”

This sets the tone for the rest of the manual and there are several references to employers making corrections or updates to payroll submissions. Examples include –

• If benefit information is received after the cut-off for the current payroll run, the employer can update the next FPS
• If there are no more payment dates in the tax year, employers can use the end-of-year process but will have to amend the final FPS and
• where an employee makes good on a benefit provided to them, they will have until 6 July following the end of the tax year to do this, and employers will have until 22 July to adjust the taxable values of the employee’s benefits

The existing guidance on how to fix problems with running payroll when you paid your employee the wrong amount or made incorrect deductions will be updated in Autumn 2026 for mandatory payrolling.

Amending payroll submissions is a labour-intensive task: it cannot be automated, and it has significant knock- on effects on internal finance reports, employees’ records and employer’s PAYE accounts with HMRC and it is to be hoped that HMRC will recognise this and put measures into place to ease this process before the legislation is finally passed.

After a slow start, this project is gathering pace, but there is still time to try payrolling benefits in 2026/27 before it becomes mandatory. Employers have until 5 April 2026 to register with HMRC to try payrolling benefits on a voluntary basis in 2026/27.

Apprenticeships – Simplification and funding to make training for under-25s free for small and medium enterprises

The government is making more than £1.5 billion available over the Spending Review period for investment in employment and skills support. This funds £820 million for the Youth Guarantee, which includes offering a guaranteed six-month paid work placement for every eligible 18 to 21-year-old who has been on Universal Credit and looking for work for 18 months – helping young people across Great Britain take that crucial first step into sustained employment. This also includes £725 million for the Growth and Skills Levy to help support apprenticeships for young people, including a change to fully fund SME apprenticeships for eligible people under 25.

Alongside this funding, the government will introduce new reforms to simplify the apprenticeship system and make it more efficient as short courses are introduced from April 2026, including removing the additional uplift to levy accounts; changing the expiry window to 12 months; changing the government’s co-investment rate to 75% for levy-paying employers once they have exhausted all their funds; and working with employers to streamline the suite of apprenticeship standards available. More details on the wider Youth Guarantee and Growth and Skills Levy package will be announced shortly.

CIS – Tackling Fraud

New HMRC powers will be introduced to tackle fraud and to impose liabilities on businesses operating within the construction sector that enter transactions where they knew or should have known it was connected with the fraudulent evasion of tax.

In addition to powers that will enable HMRC to immediately remove gross payment status, new provisions will include the power to impose penalties of 30% of lost tax on the business, its directors and other persons connected to the business.

Separately, draft legislation will also be included in the Finance Bill to take effect from April 2026, aimed at simplifying and improving CIS administration.

Those operating CIS will need to consider the changes carefully and reinforce existing procedures to appropriately monitor supply chains and relevant transactions.

This will not apply to NHS Foundation Trusts, who are not subject to CIS.

Overseas Workday Relief (OWR) – PAYE Cap Introduced

From 6 April 2026, employers applying OWR through a PAYE notification (under s.690) will be limited to excluding a maximum of 30% of an employee’s earnings from PAYE.

If an individual qualifies for a higher proportion of overseas workdays, the additional relief must be claimed via Self-Assessment. We believe this measure, aims to improve HMRC’s in-year tax collection and simplify compliance while ensuring employees can still access full relief.

Image rights payments

The government will legislate to clarify the tax treatment of image rights to ensure that all image rights payments related to an employment are treated as taxable employment income and subject to income tax, and employer and employee National Insurance contributions. This will be legislated for in Finance Bill 2026-27 and take effect from 6 April 2027.

This follows a tax case in which Bryan Robson successfully avoided an IR35 tax charge on income received relating to his image rights.

NIC relief on Salary Sacrifice Pension Contributions

Popular in the Private Sector, due to the flexibility of their Pension Schemes, operated under Salary Sacrifice arrangements will take a hit, albeit not quite yet.

From 1 April 2029, only the first £2,000 of Salary Sacrifice pension contributions will be exempt from NICs. Anything above will be subject to employer and employee NICs like other employee workplace pension contributions. However, the schemes will potentially still be worthwhile for higher earners who are seeking to avoid the impact of the tapers applying to child benefit and tax-free childcare.

Contributions through Salary Sacrifice, like all pension contributions, will still be exempt from Income Tax (subject to the usual limits).

Employers will need to report the total amount sacrificed through their existing payroll software. There are still many unanswered questions about how this will be enforced per pay preference period or annually for example and how will they define exactly what is caught. We understand HMRC will engage with stakeholders on this and publish further guidance accordingly.

General announcements

Mandatory tax adviser registration with HMRC

The Government has confirmed a major overhaul of how professional tax agents are identified and supervised. In short, anyone who deals directly with HMRC on behalf of clients — from traditional tax advisers to payroll providers operating PAYE systems for employers — will soon have to appear on a single HMRC-run register. The aim is to give taxpayers confidence that anyone representing them meets consistent, legally enforceable standards.

Those affected include all professionals who submit returns, claims, payroll information or other communications to HMRC for clients. Under the new rules, these advisers will be legally required to register with HMRC and demonstrate they meet minimum competency, conduct, and eligibility criteria. This brings payroll bureaux and outsourced payroll processors into scope where they interact with HMRC systems on employers’ behalf.

The Budget announced that mandatory registration will begin in May 2026, supported by a government investment of £36 million to update and modernise HMRC’s registration infrastructure. A transition period of at least three months will follow, and HMRC will publish more detailed timelines and guidance for different types of advisers ahead of implementation. The policy’s objective is to raise standards across the tax advice and payroll services market by giving HMRC clearer oversight of who is acting for taxpayers. It will help HMRC identify and intervene where advisers fail to meet required standards or are not legally allowed to operate, addressing long-standing gaps in the current fragmented system. The new rules will be legislated for in the Finance Bill 2025–26.

Why Not All Pay Elements Count Towards NMW

National Minimum Wage compliance is becoming a growing issue across the NHS. Trusts often assume their payroll structure is sound, only to find during an HMRC review that some pay elements have been included incorrectly. Even a small mistake can produce a large backdated liability, interest, and penalties.

A common problem is the belief that every pound paid to a worker counts towards their National Minimum Wage pay. HMRC is very strict about what can and cannot be included, and any misunderstanding puts an NHS body at risk of a compliance check.

This update sets out the core rules so payroll and finance teams can sense-check where risks may sit before HMRC does.

What Can Be Counted in NMW Pay

When reviewing your payroll for NMW compliance, each pay element must be considered on its own terms. Some payments can be included if they form part of standard pay and are structured correctly.

Included in NMW pay:

• Basic pay for hours worked
• Performance-related bonuses and incentive payments
• Most annual bonuses, if allocated proportionally
• Consolidated allowances that form part of routine pay

For many NHS roles, these elements are straightforward. Issues usually arise where additional enhancements are common.

What Must Be Excluded from NMW Pay

Several payments that appear helpful to the employee cannot be included in the NMW calculation.

Excluded from NMW pay:

• Overtime and shift premiums above basic rate
• Tips, gratuities, and service charges
• Allowances for unsocial hours or high-risk work
• Expense reimbursements
• Benefits in kind other than the permitted accommodation offset
• Employer pension contributions, loans, and redundancy payments

For NHS Trusts, the volume of enhancements and allowances can make this review more complex than it seems.

The Overtime and Premiums Trap

One of the most common pitfalls in NHS payroll is the treatment of overtime and shift premiums.
Only the basic rate can count towards NMW.

For example, if a worker is paid a basic rate of £12 per hour and £15 per hour for overtime, the NMW calculation can only use £12 per hour for every hour worked. The additional £3 per hour must be excluded.

HMRC takes a firm view on this because including premiums could give the appearance of meeting the minimum wage when the underlying basic rate is below it. These errors are easy for HMRC to identify in a compliance review and can generate significant backdated liabilities for NHS bodies.

Why This Matters for NHS Organisations

NHS payroll structures involve a wide range of enhancements, allowances, flexible working arrangements, and historic pay variations. This means NMW risks often sit unnoticed until HMRC makes contact.

A compliance review can be resource-intensive and difficult to resolve once HMRC has identified an issue. Early checks reduce the chance of avoidable costs and help ensure the Trust can evidence compliance if asked.

Support for NHS NMW Compliance Checks

CRSTAX works with NHS bodies to review pay elements, identify where the rules have been applied incorrectly, and help reduce risk before HMRC reviews arise. A clear view of what counts, what does not, and how this plays out across your payroll structure can prevent avoidable costs and administrative pressure.

If you want reassurance on your NMW position

We can carry out a confidential compliance review, highlight any areas of concern, and help you resolve them before they lead to a backdated liability.

Contact the CRSTAX team to arrange a review or to discuss your current NMW approach.

More on Employment Taxes | Expenses and Benefits | IR35/Off Payroll for the NHS

VAT Reviews | HMRC Business Approval Methods

HMRC Extends Deferral for Making Tax Digital (MTD): What NHS Finance Teams Need to Know 

HMRC has confirmed that public bodies and NHS Trusts using the GIANT (Government Information and NHS Trusts) VAT return system will not need to migrate to MTD for VAT until at least April 2027. This extends the previous deferral (to April 2026) by a further year and means Trusts should continue filing via GIANT for the time being. While we await HMRC’s formal public guidance, this aligns with earlier HMRC correspondence to GIANT users and sector updates.  

What’s changing (and what isn’t) 

• No MTD for VAT mandation for GIANT users until at least April 2027. Continue filing VAT returns through the existing GIANT process until HMRC instructs otherwise.  

• Digital record-keeping exemption remains in place for now under Regulation 32B (SI 2018/261). This is the statutory basis for exempting certain entities (including public bodies using GIANT) from digital records pending mandation.  

• HMRC has historically written directly to GIANT users to confirm deferrals (to 2025, then 2026). 

HMRC has indicated in previous GIANT letters that it will update bodies ahead of any switchover. You should expect advance notice before you’re required to move off GIANT (typically through letters and HMRC notices).  

Why this matters for NHS Trusts 

• Breathing space for planning and budgets. The extension provides time to plan for MTD alongside ERP upgrades/finance-system changes (e.g., ledger, e-invoicing, data warehouses). 

• Opportunity to align with potential s.41 VAT reform. HMRC/HMT has continued to work on public-sector VAT reforms. Aligning MTD plans with any Section 41 changes may reduce duplicated work.  

• Reduce “cliff-edge” risk. Adopting digital record-keeping disciplines early (even while exempt) lowers transition risk once a definite mandation date is set. HMRC’s core MTD requirements for digital links and functional-compatible software are already outlined in VAT Notice 700/22.  

Recommended next steps (NHS-ready checklist) 

1. Stay on GIANT for VAT submissions. 
2. Gap-assess your digital records. 
3. Map an MTD pathway within your ERP roadmap.
4. Strengthen VAT controls now.  
5. Plan communications.  

How CRSTAX can help 

• MTD-for-VAT Readiness Review (NHS): A targeted review to map your current VAT processes, data flows and digital links, and produce a GIANT→MTD migration plan. 

• ERP & Tax Controls Alignment: We sense-check VAT codes, partial exemption data, and evidence packs so you’re not retrofitting controls under pressure. 

• Section 41 Reform Watch: Briefings on the interaction between Section 41 changes and VAT recovery, plus what that means for MTD sequencing. 

• Training for NHS finance teams: Bite-size sessions on digital links, evidence, and VAT adjustments under MTD. 

What next? 

The extension to April 2027 at the earliest gives NHS bodies welcome time, but it’s not a reason to pause. Trusts that embed digital record-keeping now, tidy VAT controls, and align plans with ERP changes will have a smooth, low-risk transition when HMRC sets the date. 

Need a quick sense-check? Book a 30-minute MTD Readiness Call with our NHS VAT specialists today. 

In a significant judgment today, the UK Supreme Court has ruled in favour of HMRC in its long-running dispute with Northumbria Healthcare NHS Foundation Trust (“Northumbria”) about VAT on hospital car parking charges. This decision upholds HMRC’s position that income from NHS-operated car parks is subject to VAT, with broad financial implications for NHS Trusts across England.

Background

Car parking income generated by NHS Trusts has always been treated as subject to VAT at the standard rate (currently 20%). In February 2024, the Court of Appeal ruled in favour of Northumbria’s position that the income is non-business. It found that parking services provided by NHS Trusts fell outside the scope of VAT because they were supplied under a “special legal regime” and did not distort competition. However, HMRC appealed to the Supreme Court, which has now overturned that decision.

Key Findings

The Court found that while NHS Trusts must follow government guidelines on pricing and concessions, these are flexible recommendations, not legally binding rules. As such, the NHS is not operating under a “special legal system” for the income to be treated as non-business for VAT purposes.

Hospital car parks also compete directly with nearby private ones, as both offer the same basic service, i.e. convenient parking. If the NHS avoided VAT, it could lower prices or keep more profit, giving it an unfair edge, especially when demand far outstrips supply. This real risk of distorting competition means VAT must apply.

What This Means for NHS Trusts

This ruling creates a binding precedent requiring NHS Trusts to continue charging and accounting for VAT on car parking income. Trusts that had paused VAT payments or submitted refund claims based on the earlier Court of Appeal ruling will not recover that VAT and will now need to consider withdrawing or amending their claims.

The judgment means Northumbria’s claim will not be paid. Nor will the claims of around 70 NHS Trusts awaiting this judgment, which amounted to up to £100 million.

Effect on Car Park Construction Costs

The decision affirms that NHS car parking remains a taxable business activity, allowing Trusts to continue recovering VAT costs on construction and operational expenses. For those with substantial investments in car park infrastructure, this mitigates the risk of large VAT adjustments under the Capital Goods Scheme.

Trusts planning new car park developments can proceed with greater clarity, knowing VAT incurred on construction costs should be recoverable. However, they should still carefully assess contractual and operational models, particularly where third-party involvement is contemplated.

Recommended Next Steps

NHS Trusts should now take the following actions following the Supreme Court ruling:

• Ensure VAT is correctly accounted for on car parking income going forward.
• Consider withdrawing or revising any outstanding claims for VAT refunds on past income.
• Review input tax recovery assumptions on car park capital expenditure.
• Evaluate Partial Exemption methods in light of continued business treatment.
• Confirm third-party contracts align with VAT obligations and determine if restructuring is required.

Need Support?

The NHS VAT team at CRSTAX is available to help Trusts assess the implications of this ruling and provide ongoing VAT compliance support.

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