Background

Social care businesses are treated a little differently by HMRC with regards to VAT (Value Added Tax). A good proportion of businesses up and down the country buy and sell products or services by paying VAT, charging VAT and then periodically depending on their VAT scheme they submit a VAT return. They declare all of the VAT they have charged on sales and all the VAT they have paid in purchases and pay the balance to HMRC. It’s different for most social care businesses.

VAT Exempt

Your Home Care and lots of other social care businesses are registered with HMRC as VAT exempt. This means that we do not charge VAT on our services but we cannot claim back the VAT we pay on products and services such as rent and PPE.

Zero Rated VAT

With Zero Rated VAT, we still wouldn’t charge our clients VAT on the services we provide but we’d be able to claim back the VAT we’ve paid on goods and services. This would be a far fairer VAT regime for the social care sector and would allow us to reinvest that money back in to the business to further support our staff and clients.

Where Would the Money be Spent?

If we were to be able to re-claim VAT from HMRC we could use that money to improve our services to our clients but also working conditions for our Home Care Assistants. That could be in the form of many things but here are some examples:

• Extra Staff Training – We could provide more specialist training to our Home Care Assistants to support clients with more specialist needs.
• We could reinvest the money into staff benefits – It’s well documented that Home Care Assistants do not get the pay that they deserve.
• Technology – This is an another area we’re already investing in but it would allow us to invest in equipment to help support our clients.

Lee Anderson MP and Ben Bradley MP

You may have seen that last month we had a visit from our local MPs. Both Lee Anderson MP for Ashfield and Ben Bradley MP for Mansfield visited our office to catch up and talk about such things as RESTORE2, starting a business in a pandemic, recruitment in the area and we also spoke to them about Zero Rated VAT. Not only did we explain the campaign to them but we also gave them letters to deliver to the treasury on our behalf.

How Can Your Help?

The Zero Rated Rated for Social Care campaign have created a government petition online. At 10,000 signatures, the government will look at our petition. At 100,000 signatures, the petition will be considered for debate in Parliament.
Through our petition we can bring our campaign to the government’s attention.
We need your support today to help us be part of a fairer VAT regime.

Sign it here: https://petition.parliament.uk/petitions/550241

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