§ Mrs. Helen Clark
To ask the Chancellor of the Exchequer if he will make a statement about the impact of the charging of VAT on the residential costs of nursing home care.
§ Mr. Boateng
The Government are of the clear view that the care of vulnerable people provided in all residential homes should not be subject to VAT. In May. the VAT Tribunal confirmed that the care provided in residential nursing homes was exempt from VAT. However, the Tribunal also ruled that care provided by a commercial body was not exempt, and Customs and Excise are currently appealing against that ruling. Whatever the outcome of that appeal, the Government will take steps to ensure that residents of care homes and their families do not face increased costs as a result of VAT.