27 March 2023
generalThe UK government is to introduce statutory regulation of the providers of supported living accommodation for young people in 2023. These services are often referred to as “independent supported living” or ISL. Supported living is the provision of accommodation with additional services of care and support for 16-17 year olds. Providers will need to register with OFSTED, who will undertake inspections every 3 years. A number of quality standards for the accommodation and the support have been created.
The VAT impact is that currently these services, when provided by private bodies are VAT standard rate, because the ISL service is not subject to state regulation, but these changes convert the supply to VAT exempt. The impact for these private providers is that although no VAT is added to the fees charged (typically to Local Authorities), the exempt income will restrict VAT input tax recovery on costs.
If you require more information, please speak with the James Cowper Kreston Indirect Tax team.
