VAT on Care services using Direct Payments?

[Charlie2750]

I use Direct Payments to pay for daycare for my son.He attends 5 days a week and has done for 2 years since his previous commissioned service closed.Yesterday I recieved a letter to say we had to pay VAT on all his services and the only way to get out of paying this tax was by asking the Local Authority to pay it and revert back to a commissioned service.So we dont need Direct Payments again! I thought that a service for disabled people was /should be VAT Exempt or Zero rated? I have no objection to reverting back to the LA paying however this seems like a violation of our rights to choose by adding vat because we would not get a top up from direct payments and anyone paying by DP would be paying more.Am I missing something?

[Skye_Bear Expert]

Good Morning,

My name is Lyndsey and I am a Contact & Assessment Team Advisor for The Mencap Learning Disability Helpline. I would highly recommend that you either email the Helpline on [e-mail] or call us on our free phone helpline number: 0808 808 1111.

We have a team of Information & Advice Officers who have a great wealth of knowledge around the social care system.

Thank you in advance.

[Charlie2750 Community friend in reply to Skye_Bear]

Hello Skye_Bear thank you for your reply.I have since found out that in the region where we live Day care providers have to pay VAT because they are a business and they are not regulated by the Care Quality Commission!I am horrified to think that the CQC do not regulate any day care services for Learning disabled clients.I am sure I heard that some while ago but had forgotten that.Is this a national situation?

I have e-mailed the CQC to say how I am concerned.The way I see it I could set up a business with no experience and employ people with no experience to look after very vulnerable adults and get money from the local authority without question.Of course it is not as bleak as it sounds because there are probably some laws against this and the clients would soon be reporting to their carers, It concerns me though and I hope I have got it wrong!

On the other hand I now find that I will be ditching the Direct Payments so that the Local Authority will pay for the care as a commissioned service!