Hospices VAT Refund Scheme

The VAT People has many years of experience in helping hospices to navigate through complicated VAT processes, including the refund scheme, which was rolled out following the 2015 Budget announcement.

Our qualified team of specialists know all too well how difficult operations for hospices can be, and we are dedicated to helping you to increase your understanding of VAT so you are able to take advantage of any available reliefs and discounts.

Contact us by calling 0161 477 6600, or fill out an online enquiry form and we will get back to you at a more convenient time.

Understanding VAT refund scheme for hospices

In the complex landscape of business VAT, understanding the VAT refund scheme is crucial for hospices. It is a scheme designed specifically for public bodies and certain other organisations, including hospices. Our seasoned team has deep insights into these regulations and can guide you through each step.

Applicability of VAT refund schemes

Every hospice's VAT situation is unique, and therefore, the VAT refund scheme's applicability can vary. We will help you ascertain your eligibility, identify opportunities, and guide you through the process of claiming VAT refunds, taking into account every intricacy of your specific circumstances.

Recovery potential for hospices

From medical supplies to maintenance services, there is a broad range of goods and services for which a hospice can reclaim VAT. Our experts will walk you through this comprehensive list, highlighting potential areas of VAT recovery that you might not be aware of, thereby optimising your refund potential.

Properly managing VAT refunds can bring about considerable financial relief for your hospice. It can lead to better cash flow management, free up funds for crucial services, and help your hospice meet its core objectives more effectively. With our expert assistance, these benefits can be realised and sustained over time.

Classifying your income: taxable, exempt, or non-business

Correctly classifying your income is vital for achieving VAT compliance and optimising refund potential. Whether your income falls under taxable, exempt, or non-business categories can substantially impact your VAT obligations and entitlements. We provide expert guidance to ensure correct categorisation, mitigating risks while maximising benefits.

Contact The VAT People today

In an increasingly complex VAT landscape, effective management of VAT is a necessity for hospices. The VAT People are committed to helping your hospice achieve its financial goals through expert VAT consultation and management. We take the stress away from navigating the intricacies of VAT. Reach out to us today for an initial consultation and discover how we can support your journey towards optimising your VAT recovery.

What is the VAT refund scheme for hospices?

From 2015, palliative care charities were given the chance to recover VAT on non-business activities, which have been funded by donations or public funds. The scheme is intended to benefit palliative care charities providing services for both adults and children.

Organisations that are not charities may not benefit from the UK-wide scheme, which means that the subsidiaries of hospices may also not benefit. Similarly, organisations that are not hospices, but provide some palliative care, such as a nursing home, cannot benefit.

Hospices are often surprised to learn about the range of items that qualify for VAT recovery. Our team will elucidate the key recovery areas, ensuring no opportunity is overlooked.

What can hospices recover?

The refund scheme was introduced to cover the costs incurred on non-business activities. Hospices can continue to recover VAT on their VATable business activities (if they are registered for VAT), and will still not be able to recover the VAT on their exempt activities.

Since the majority of activities for charitable hospices are classed as non-business, the scheme ensures they move away from a position of being able to recover very little of their input VAT to being able to recover the majority of their VAT.

Hospices can also recover more of the money they spend on overheads than before the scheme was introduced.

How do hospices benefit? 

For hospices to benefit from the refund scheme, those that are already VAT-registered can reclaim costs through their VAT returns. Those that are not can submit separate claims forms to HMRC. In order to benefit, hospices need to carry out the following actions:

• Differentiate between non-business activities and those that are exempt from VAT
• Identify a method of apportioning VAT on costs between non-business and business activities (which should be formally agreed with HMRC)
• Implement a VAT coding structure that will allow it to allocate VAT incurred on expenditure to the various VAT recovery categories.

VAT refund schemes can unlock significant financial benefits for hospices, aiding their crucial services. Our services illuminate how these schemes can improve your organisation's bottom line and enhance operational sustainability.

How do I know if my income is taxable, exempt or non-business? 

If you are in any doubt regarding whether income is taxable, exempt or classed as non-business, expert advice is recommended. The main issue hospices are likely to experience is NHS/government funding, and whether it constitutes as non-business or exempt income.

The NHS/government funding is usually considered to be a grant (although there may be some conditions attached), whereas then the income will usually be classed as non-business, meaning hospices are then able to recover the input VAT.

The decision as to whether a form of income will be considered non business or exempt will be dependent on the exact terms of the agreement. In general, if the funding relates to a specific named individual or care plan, it is likely to be classified as exempt, whereas if it simply has some general conditions, it is likely to be classified as non-business.

Hospices are advised to seek assistance from a professional when it comes to deciphering this complicated process - and The VAT People is here to help.