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 6th 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 pandemic CEOs, 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.
Commenting on this, Deary said, “Home care providers are at the front line, providing an invaluable service to some of the most vulnerable in our society. 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 and 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. Regulatory fees, training, office overheads to name but a few. 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 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, Jones said, “Whilst we welcomed the temporary suspension of VAT on PPE which has been a huge help, we are urging the government to go a step further and make a wholesale change that will 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.
“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.
In closing, Deary said, “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.”
Founding members of the lobby group are Ken Deary (Right at Home UK), Martin Jones (Home Instead Senior Care UK), Michelle Fenwick (Heritage Healthcare), Lise Fyfe (Caremark), Alex Green (Radfield Homecare), Wayne Smith (Bluebird Care) and Yvonne Thomlinson (Kare Plus). They will all be presenting at the webinar.
For more information on the webinar and to register your place, please visit https://us02web.zoom.us/meeting/register/tZ0kcOqpqz8tGtYy7whEzQAHEvCVqdv2eulx or contact firstname.lastname@example.org