The construction had been contracted on a design and build basis with the contractor via an NEC4 framework contract. The Trust had initially budgeted for VAT recovery on the design fees and no VAT recovery on the construction costs.
Following several meetings, Liaison Financial carried out a strategic restructuring of the procurement process for the hospital. This protected some of the VAT recovery assumptions that the Trust had made on design fees. Consideration was also given to strategic aspects of the building such as option to tax, business activity input VAT and subsequent capital goods scheme adjustments that would be required in future years. Activities such as car parking, retail outlets and hospital restaurant were considered, investigated and reported to the Trust. Via financial modelling, the Liaison Financial advisor was able to demonstrate the implications in each case, and the implications both from a capital and revenue perspective on the project.
The impact that Liaison Financial’s work has had on this specific project has been significant. It highlights the expertise of our advisors and the value that we add on strategic projects. It also demonstrates the importance of regular VAT strategy meetings and the value that these ongoing working relationships add to our clients.
Midlands Acute Trust