Elderly people living in residential care homes are being threatened with weekly charges of up to £1...
Elderly people living in residential care homes are being threatened with weekly charges of up to £100 in VAT.
Care services are usually exempt from VAT, but a recent decision by a London VAT tribunal may mean that residents who pay their own bills in 20,000 nursing homes in the south-east may now have to pay the 17.5% tax.
The issue arose when a London-based nursing home tried to register for VAT so it could recover VAT charged to it. Subsequently the tribunal decided that because residential care homes do not provide medical care and are profit-making businesses, they should be charged VAT.
Peter Gatenby, director and general manager at Age Concern Financial Partnerships, said: 'If this is a serious proposal it would wipe out the Government's proposed plan to offer up to £100 per week for help with nursing costs. I cannot imagine they will want to be giving money away for nursing care. If they did, then lobbying groups would be up in arms against them.'
