--- title: VAT and Care Homes – Exempt Status and Voluntary Registration description: Essential information about VAT for care homes in the UK. Including exemption status and VAT for the sale of additional standard-rated items. image: https://blog.shorts.uk.com/hubfs/care%20homes.jpg --- [![Shorts_logo_White](https://blog.shorts.uk.com/hubfs/New%20Site%202018/Shorts_logo_White.svg "Shorts_logo_White")](https://www.shorts.uk.com/) [Blogs & News](https://blog.shorts.uk.com/) > [VAT](https://blog.shorts.uk.com/topic/vat) # VAT and Care Homes – Exempt Status and Voluntary Registration Lynne Gill - 7 August 2024 ###### Select topic - Please Select - [ Audit ](https://blog.shorts.uk.com/topic/audit) [ Business Taxes ](https://blog.shorts.uk.com/topic/business-taxes) [ Radius – R&D Tax Relief & Patent Box ](https://blog.shorts.uk.com/topic/radius-rd-tax-relief-patent-box) [ Corporate Finance ](https://blog.shorts.uk.com/topic/corporate-finance) [ GENUS Management Accounts ](https://blog.shorts.uk.com/topic/genus-management-accounts) [ VAT ](https://blog.shorts.uk.com/topic/vat) [ Private Client ](https://blog.shorts.uk.com/topic/private-client) [ Payroll ](https://blog.shorts.uk.com/topic/payroll) [ EOT ](https://blog.shorts.uk.com/topic/eot) [ International Taxes ](https://blog.shorts.uk.com/topic/international-taxes) ![featured image](https://blog.shorts.uk.com/hubfs/care%20homes.jpg) Care homes are residential facilities that provide accommodation, personal care and support for people who require assistance with daily activities. These activities can include bathing, dressing, eating, and managing medications. Care homes are usually operated by private companies, local councils, or charitable organisations. The goal of care homes is to create a safe and supportive environment where residents can receive the care they need while maintaining as much independence as possible. ## Do care homes need to charge VAT? The provision of care by regulated care homes is **exempt from VAT**. [VAT exemption](https://blog.shorts.uk.com/exempt-from-vat-or-zero-rated-whats-the-difference), as opposed to zero-rating, means that VAT is not charged on the supply to customers, but the care home can’t reclaim any VAT incurred on the costs. Because the provision of care or treatment is a VAT-exempt supply, care homes are not generally able to register for [VAT](https://blog.shorts.uk.com/what-is-vat) and, therefore, cannot reclaim VAT incurred on expenditure. ### What about other goods sold by care homes? While the primary service of treatment and care is exempt from VAT, some care homes have additional or secondary income sources that **are** subject to VAT, such as the sale of confectionery, toiletries, cards, and stationery. This income does enable a care home to register for VAT on a **voluntary basis**. Voluntary VAT registration is allowed even if the taxable turnover is less than the £90,000 VAT threshold. However, for the majority of care homes, charging VAT on sales to residents and visitors outweighs the ability to reclaim VAT on some expenditures. ### Other opportunities There have, historically, been opportunities for a care home group to register for VAT and reclaim, in some cases, large amounts of VAT. However, in April 2025, HMRC released a business brief, [The Use of VAT Grouping Within the Care Industry](https://www.gov.uk/government/publications/revenue-and-customs-brief-2-2025-the-use-of-vat-grouping-within-the-care-industry/use-of-vat-grouping-within-the-care-industry#:~:text=HMRC%20has%20identified%20a%20growing,otherwise%20be%20exempt%20from%20VAT.). It states that HMRC considers VAT care home group structures to be tax avoidance and outlines the measures which HMRC will take to ensure care homes are not able to reclaim VAT using this structure.  Specialist advice should be sought if you already have a VAT group registration or are looking into putting one in place.   ![author](https://blog.shorts.uk.com/hubfs/ZT_cPBSU-1-1.jpeg) #### Lynne Gill My area of expertise is land and property transactions but I have extensive knowledge of both domestic and international VAT and I love complex VAT queries. I have an Honours degree in Business Studies and a VAT legal and technical qualification from the Institute of Indirect Taxation. [View my articles](https://blog.shorts.uk.com/author/lynne-gill) Tags: [VAT](https://blog.shorts.uk.com/topic/vat) Share this on - - - [Questions? Get in touch with us](https://www.shorts.uk.com/contact/) ###### Tax Saving Guide 2026-27 Written especially for entrepreneurs and owner-managed businesses, this guide is full of planning ideas and tax risks to avoid. 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