Unfair treatment

Fiscal neutrality in relation to welfare services

The taxpayer a limited company which was a not-for-profit organisation provided welfare services to individuals with learning difficulties. The clients would be collected from their homes at the beginning of the day taken to the relevant location and returned later. Activities included cooking exercise money and social skills and personal health advice. About 25% of the services were supplied to individuals in residential homes 50% were paid for directly by the local authority and the rest supplied to individuals or their carers out of their personal budgets provided by the council.

The services did not qualify for exemption under VATA 1994 Sch 9 group 7 item 9 because the company was not a local authority public body or state regulated company (and therefore not regulated by the Health and Social Care Act). However ...