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Webinar to launch 0% VAT campaign for social care

24 July, 2020

A consortium of home care providers has united to lobby the government for a change to the sector’s current VAT regime, which they say is punitive. All home care providers are being invited to attend a webinar on Thursday 6 August where the issues facing the sector and plans for the lobbying campaign will be outlined.

Founding consortium members are hoping other providers will join them in the campaign. At the start of the Covid-19 pandemic chief executives Ken Deary, Right at Home and Martin Jones, Home Instead Senior Care conceived the idea for the consortium when VAT charges on PPE brought into sharp focus the inequity of social care’s VAT status.

Goods and services provided by regulated social care organisations are exempt from VAT, meaning that they do not charge VAT on their services. However, their current VAT status means they cannot reclaim VAT on expenses. The group want social care services to become zero-rated for VAT.

“Home care providers are at the front line, providing an invaluable service to some of the most vulnerable in our society,” said Mr Deary.

“We are a silent partner to the NHS, playing a key role in alleviating pressure on hospital beds by keeping people safe and well in their own homes.

“Our sector is made up of many small, independent operators. Costs go up year on year and we operate under this punitive VAT regime that sees margins squeezed.

“Social care providers operate in a highly-regulated sector and as such there are many associated costs of running a business, including regulatory fees, training and office overheads. And we were already facing increased financial pressures, even before Covid-19, with the cost of pension provision, National Living Wage increases to name but a few.

“The cost to the Treasury to change social care to zero rated would be relatively small annually, but it would make a significant contribution to keeping financially under pressure social care providers in business, both in the short and long term for the huge benefit of their clients, carers and, let’s not forget, the NHS.”

The sector welcomed the temporary change to the VAT status of PPE during the pandemic but says it needs to see a permanent change to the sector’s status.

Speaking about this and how any savings would be spent, Martin Jones said that while the temporary suspension of VAT on PPE had been a huge help, the government needed to go a step further and make a wholesale change that would benefit clients and carers alike.

As a sector we are really keen to reinvest any savings into delivering an even better service for our clients and to better support our carers,” said Mr Jones.

“This would be through increasing rates of pay to carers, additional training opportunities, allowing carers to spend more time with their clients for those providers who are forced into delivering shorter duration calls.

“Providers would have more flexibility to invest in technology to support clients with items such as Raizer chairs, for example, becoming more commonplace.”

The consortium argues that they should operate under the same VAT regime as mobility aid retailers, which serve practically the same client base, who are already zero rated.

Ken Deary

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