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Calls for the abandonment of the dementia tax: Care England responds

by Kirsty Kirsty

Commenting on The Filo Project’s open letter to Downing Street asking the government to abandon the so-called dementia tax, Professor Martin Green OBE, Chief Executive of Care England, said:
“The disparity in the VAT treatment of charities and non-charities for community services in England is something the Government needs to look hard at. This must be examined alongside both residential and domiciliary care providers who are currently unable to recover VAT as welfare services are exempt. This means social care providers are unable to recover input VAT on certain services.  If the Government were to zero rate VAT for welfare services or endorse welfare services restructuring, it would inject hundreds of millions of pounds in additional funds into the social care sector, directly to struggling care providers. This process has already been adopted by a number of Local Authorities in England and Scotland, but no Government position has been taken, meaning other Local Authorities and the NHS are spending millions on VAT consultancy and advice to navigate the current confusing and inconsistent VAT policy. We know the challenging position Local Authorities are in currently. A change to VAT policy for social care would see between £30 to £50 per week added to every weekly care package funded by Local Authorities and the NHS equivalent to a 4-6% fee uplift and go a significant way to help solve the social care funding crisis

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