HMRC Signals VAT Reform: Care Home Crackdown and Major Capital Goods Scheme Threshold Hike

HMRC is taking a more assertive approach to VAT, with two major changes in 2025.
The first change targets VAT structuring in the care home sector, potentially challenging long-standing arrangements previously protected under EU law.
Care providers using these structures may face increased costs and possible litigation as HMRC seeks to protect revenue.
The second change raises the Capital Goods Scheme threshold for properties from £250,000 to £600,000 in April 2026, reducing administrative burden but potentially disadvantaging charities and partially exempt organisations.
These moves may signal broader VAT reforms and a review of other long-standing thresholds.

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.