Liability ― welfare services

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note examines the liability of supplies of welfare services.

For an overview of the concept of VAT liability in generally, see the Liability ― overview guidance note.

For in-depth commentary on the legislation and case law on supplies of welfare services, see De Voil Indirect Tax Service V4.146–V4.150.

Liability of welfare services ― the basics

Welfare services can qualify for VAT exemption but only where they are supplied by certain kinds of organisations (charities, public bodies and state-regulated private providers) and the services are regarded as welfare within the VAT meaning of the term.

There may also be circumstances when supplies within the welfare sphere qualify for the education exemption.

As well as exemption, supplies of advice and information related to welfare services can be reduced-rated when provided by certain organisations.

There will also be circumstances where the provision of welfare services is regarded as non-business and is therefore outside the scope of VAT. This can include (for example) advice and information provided free of charge and (by concession) welfare services

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