Is my Care Home / Care Setting eligible for zero-rated VAT?
To qualify for zero-rating, the goods must be eligible, and they must be supplied to the individual for their domestic or personal use. For the goods to be eligible they need to be designed solely for use by a disabled person. This is an important point.
Even if this condition is met, the supply doesn’t meet the domestic or personal use condition where the individual is in a care home.
The HMRC guidance states:
What ‘domestic or personal use’ means
‘Domestic or personal use’ means that the supply is needed specifically for the use of a disabled individual or series of disabled individuals.
The following are excluded from the term ‘domestic or personal use’, and not eligible for VAT relief:
- goods and services used for business purposes.
- supplies of eligible goods made widely available for a whole group of people to use as they wish, for example, a stair lift installed in a charity building and made available for the general use or convenience of all those chronically sick or disabled persons who might need it, rather than for the personal use of specified individuals.
- goods and services supplied to:
- an inpatient or resident of a hospital or nursing home.
- any person attending the premises of a hospital or nursing home for care or treatment.
- any other person or commercial establishment, with the exception of a charity, where the goods are for use by, or in connection with, care provided to an inpatient or resident of a health institution or to a patient whilst attending the premises of a health institution where the items are intended for use in the care or treatment provided in the relevant hospital, nursing home or health institution.
For the full official guidance, visit GOV.UK