VAT restructuring - HMRC issues new guidance

Please see the latest brief from HMRC regarding VAT grouping in the care industry.

They have seen significant increase in the use of this approach in the care sector and this brief outlines what they are going to do about it going forward.

They will not accept the development of any further approaches to create these vehicles. They will be writing to individual providers who they see have created these with a view towards tax avoidance and carrying out investigations. They will inform LA and NHS commissioners about their change in approach, and they are not intending to penalise or back claim.

Revenue and Customs Brief 2 (2025): the use of VAT grouping within the care industry - GOV.UK