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

HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w 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

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

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

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

5m Emma Smith, Managing Editor