Introduction Background Note
3.Section 41(3) provides that a Government department may claim a refund of the VAT it pays on certain goods and services, if and to the extent that the Treasury so directs. This is to ensure that VAT is not an obstacle to the contracting out of activities to the public and voluntary sectors.
4.Section 41(6) provides that “Government department” includes “any body of persons exercising functions on behalf of a Minister of the Crown”.  For the purposes of subsection (6) bodies listed in subsection (7) are to be regarded as a body of persons exercising functions on behalf of a Minister of the Crown”.
5.The bodies named in section 41(7) are NHS bodies.
6.The Care Act 2014 will – if passed - establish the NHS bodies referred to in the section.
7.This measure ensures that the bodies referred to in the section may reclaim the VAT they pay on certain goods and services as provided for in section 41(3).