Care Home Conference

Last month, VITA was delighted to support Scottish Care’s Care Home Conference 2025 as one of their commercial partners.

Representing VITA on the day were Tony and Graeme who had the pleasure of connecting with many professionals across the care sector. While many providers operate under the VAT exemption, conversations revealed a strong interest in the complexities and nuances of VAT – proof that even the driest topics spark curiosity when they impact the bottom line!

As Tony noted: “It was great to speak to so many Scottish Care members about how VAT impacts their organisation, with discussions around the risks and opportunities that arise from specific challenges and general HMRC developments.”

Our most common area of conversation surrounded the policy statement issued by HMRC earlier this year declaring that a long-standing VAT structure used by UK care providers is now considered to be tax avoidance. The structure in question was where an unregulated subsidiary grouped for VAT purposes with the regulated parent company. This allowed providers to charge VAT to local authorities, who could reclaim using their S33 special status. The arrangement was cost-neutral for funders and enabled providers to recover substantial VAT on operating and capital costs, especially during large developments or refurbishments. HMRC has begun contacting providers directly and with a shift in sentiment from local authorities that a proactive approach from providers to engage early with HMRC would demonstrate transparency.

We also found it interesting discussing property development options, such as when new buildings could zero rate the VAT on construction works and that the creation of new beds could also be zero rated, in specific circumstances.

Graeme was quick to remind everyone that “the earlier VAT is considered the better and understanding the rules allows you to better play the game”

This event was another step in strengthening our relationship with Scottish Care, which began earlier this year with a webinar where Tony delivered a webinar overview of the VAT challenges and opportunities for the sector. Our Managing Partner, Greg, also had an article published discussing the VAT structure change in a recent issue of the Carer Digital magazine, which you can read in full here - https://lnkd.in/eikxSC-7