Leading domiciliary care providers’ representative, the United Kingdom Homecare Association, reacts to the emergency budget of the new Government as follows.

While recognising that a 2.5% increase in VAT will affect many businesses, this additional cost is a double-blow for the UK’s homecare providers. Regulated care services are currently exempt from VAT, meaning that although customers are not charged VAT, homecare providers themselves are unable to reclaim tax on the goods and services necessary to deliver the service. At the same time, providers have little chance – if any – of recovering these costs from their cash-strapped local authority purchasers.

UKHCA’s Chair, Mike Padgham, said: “UKHCA’s Board is due to meet and consider a range of options, including a concerted campaign to get regulated care services zero-rated status.”

In addition, spending cuts that the budget demands from councils – who are the majority purchaser of social care – are routinely passed on to independent sector providers. At the same time councils are creating more onerous and costly contract arrangements. Padgham continued:

“Care providers realise that they will share in the pain to put the country’s finances on an even footing, but the homecare sector has already been subject to a relentless pressure to lower prices long before the current financial crisis. Increased taxation and public spending cuts mustn’t be allowed to damage essential frontline services.”

Ends.