Changes in VAT rules may favour care homes

Posted on December 1st, by editor in Caring Times. No Comments

Certain operators could be faced with an increase of around 15% in the cost of using certain categories of temporary staff supplied by management agencies because of the VAT consequences which result from new regulations brought in by the Department of Trade and Industry in January. However, the services of registered and enrolled nurses provided by an agency will remain exempt from VAT, as will the supply of all other carers who carry out their duties within a registered institution, a situation which creates a clear distortion between home care and residential care, and could lead to a strong move in favour of the latter. Accountants and business advisers Hazlewoods say the new regulations make it illegal for employment bureaux to continue to trade unless they have actual contracts of employment with the temporary staff. Hazlewood’s care sector manager Rachel Dale said bureaux were now regarded as principals in the supply of the staff, and were required to charge VAT at 17.5% on the full amount receivable f

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