- HMRC published RCB 2 2025 on VAT grouping in the care industry
- Focus on state-regulated care providers forming VAT groups with non-regulated providers
- Non-regulated entities in VAT groups lead to taxable welfare services
- Enables VAT recovery on costs for services that would be VAT exempt
- HMRC views this as tax avoidance
- HMRC may refuse new VAT group registrations designed for such structures
- HMRC will review and investigate suspected avoidance schemes in VAT groups
- Relevant parties may be removed from VAT groups if necessary
Source: taxscape.deloitte.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
