HMRC have published Spotlight 70 to bring further attention to the use of VAT grouping arrangements by some residential care providers to enable recovery of VAT on costs which would otherwise not be recoverable.
HMRC set out their approach to the VAT treatment of state-regulated care providers which form a VAT group with a non-state-regulated provider in Revenue & Customs Brief 2/2025. The Brief noted HMRC’s concerns around the ‘growing use of VAT grouping structures’ by providers to recover VAT on costs relating to supplies of welfare services that otherwise would be exempt.
The arrangements involve bringing an unregulated care provider into the supply chain between the regulated provider and its ‘customer’ to which the supplies of welfare services are made (i.e. a local authority or the NHS). As an unregulated care provider the supplies are standard rated.
Although the overall effect of the supplies is the same ...
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HMRC have published Spotlight 70 to bring further attention to the use of VAT grouping arrangements by some residential care providers to enable recovery of VAT on costs which would otherwise not be recoverable.
HMRC set out their approach to the VAT treatment of state-regulated care providers which form a VAT group with a non-state-regulated provider in Revenue & Customs Brief 2/2025. The Brief noted HMRC’s concerns around the ‘growing use of VAT grouping structures’ by providers to recover VAT on costs relating to supplies of welfare services that otherwise would be exempt.
The arrangements involve bringing an unregulated care provider into the supply chain between the regulated provider and its ‘customer’ to which the supplies of welfare services are made (i.e. a local authority or the NHS). As an unregulated care provider the supplies are standard rated.
Although the overall effect of the supplies is the same ...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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