Managed equipment service (MES) contracts have long been used by the NHS as a means to replace medical equipment without capital expenditure. The contract usually involves the MES supplier providing equipment within a package of services including maintenance and provision of consumables, paid for by the customer from operating expenditure. In addition, it is often possible for the customer to recover VAT through the contracted out service rules. However, the two main features of a MES, avoidance of capital expenditure and recovery of VAT, are about to become more challenging to achieve due to the implementation of IFRS 16. This article explores the issues and proposes a solution for some situations.
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Mark Magrath MBAI am a management consultant with 12 years experience as an executive director in an NHS Foundation Trust, including 10 years as Deputy Chief Executive. I only write blogs on projects and assignments that I have personally led. My aim is to write amazing content that combines real world experience with insightful advice. Categories
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August 2021
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