Personal Care Services: VAT
The question
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of a reduced rate of VAT on labour-intensive personal care services; and on its potential effect on employment, apprenticeships and tax revenues in the sector.
Answered by Treasury
Supplies of welfare services, including the provision of care, are already exempt from VAT if they are supplied by eligible bodies, such as public bodies or charities.
VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. Exceptions to the standard rate or extensions of existing reliefs have always been limited and balanced against affordability considerations.
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