TaxPersonal TaxTaxman backs down over home care tax after stinging protests

Taxman backs down over home care tax after stinging protests

Customs & Excise has backed down and introduced an extra statutory concession for VAT charged to employment bureaux supplying home care for the elderly following stinging criticism from care workers and their agents.

The move follows government proposals to clarify the contractual position of temporary workers supplied by employment bureaux which meant staff were contracted to the bureaux supplying them and not with the client hiring them.

Deloitte & Touche VAT partner John Kennedy said: ‘Customs has listened to genuine concerns raised by one of the most vulnerable sections of the community. It would always be better if that was enshrined in law rather than as an Extra Statutory Concession because if there was a dispute there could be problems.’

The increased VAT burden was expected to hit charities who hire care staff, office workers and other personnel through agencies hardest.

It was feared the move would signal a switch from care at home to residential care for both the elderly and the disabled.

Now, the concession should allow businesses providing home care services to exclude the salary and related costs of home care workers from the value of their supplies.

The government has recently sought to promote closer working with charities who also provide services to elderly and disabled people. Critics have highlighted the attraction of having charities undertake this work.

Without the £12bn voluntary sector’s involvement, the government would be forced to fund carers.’Provided we do not find in the detail that there is significant restriction or limitation, this is a very, very positive statement from Customs,’ Kennedy added.

Exclusive: Government is bringing in GAAR by-the-back-door, English ICA warns

Related Articles

Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

3w Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

2m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

4m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

5m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

6m Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

7m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

9m Alia Shoaib, Reporter