The Treasury has hit the National Health Service with a £100m ($197m) bill for value added tax by insisting it pay the tax on the full cost of employing agency doctors and other medical professionals, according to the accountants RSM Bentley Jennison.

NHS organisations are allowed to reclaim VAT on the employment of agency nurses, and until recently paid VAT only on the commission that employment agencies charged when they hired doctors from them.

Now, according to Martin Kaney, director of NHS VAT services at the accountants, the Revenue has ruled that from the start of the next tax year, VAT will be charged on the full cost of employing doctors, not just the commission.

The announcement, Mr Kaney said, was "slipped into the small print of the Budget announcement in March" but the NHS organisations have been given no guidance to alert them to its budgetary impact.

His firm estimates that the cost will be over £100m. "This is money taken out of healthcare and given back to the Treasury coffers."

Revenue & Customs and the Treasury, he said, have remained "stubbornly silent" over why agency nurses are VAT-reclaimable, but doctors are not, particularly when the NHS can claim relief on professional and management consultant fees, as well as on agency clerical staff.

The logical solution would be to allow VAT relief on the supply of all medical professionals, not just nurses: "This could be achieved by a stroke of the pen at the Treasury by amending the VAT rules for the NHS - something that is done almost every year."

However, with public spending under pressure it is unlikely the Treasury will want to take an action that would reduce its revenue.

The VAT issue, however, underlines fears in the NHS that the Treasury may seek, one way or another, to claw back at least some of this year's £2bn underspend.

Although health ministers and David Nicholson, the NHS chief executive, say they have been given assurances the service would be able to keep its surplus - at a time when it was projected to be £1.8bn - last year the Treasury clawed back £2bn of unspent NHS capital.