VAT – One step at a time!
Although Brexit seems to be the only thing talked about these days the challenges with social care, in particular homecare, still exist.
Way Ahead Care Managing Director, Richard Smith, took it upon himself to remind our Taunton MP Rebecca Pow, of these challenges. He brought one solution to Rebecca that would make things a little easier for homecare providers – the issue of VAT.
Many people are unaware that homecare providers are exempt of VAT. This means that they are unable to charge it, but more importantly, unable to claim it back. As a result everyday items or services required for running a homecare service are all 20% more expensive. This would include the cost of computers, mobile phones, photocopiers etc. It also includes the costs of advertising and services from other professionals like solicitors and accounts. This addition 20% in overheads makes a significant difference in an industry with very low margins and continued pressures to raise salaries and pay. However if care services were VAT exempt then providers would then be able to claim back the VAT they are charged.
Richard was pleased to hear back from Rebecca with regard to this issue which also included a response from the Treasury.
Although this is probably nothing to get too excited about just yet, we are pleased that this issue has been listened to. We wait with hope that something might be considered in the future or included in the Social Care Green Paper expected in April.