Industry sector:

Care home: VAT

Care homes and VAT

The provision of care services is exempt from VAT.

Businesses whose activities consist only of exempt supplies cannot register for VAT and cannot recover any VAT on purchases of goods and services to be used in making those exempt supplies.

If the business is going to engage in activities other than the supply of care, the liability to VAT of these activities should be established. However, providing that the value of any taxable supplies you might make does not exceed the current VAT threshold there is no obligation on you to register for VAT.

Contact the VAT Helpline on 0300 200 3700 if you need more guidance. HM Revenue & Customs (HMRC) publish a wide range of helpful publications including VAT Notice 700/1 Should I be registered for VAT? and VAT Notice 701/31 Health institutions. You can download VAT publications from the website.

Making Tax Digital (MTD) for VAT

Under HMRC's Making Tax Digital initiative, VAT-registered businesses with taxable turnover above the VAT threshold must keep records digitally and use special software to submit their VAT returns. You can find out more about MTD on the website.