The purpose of this eBrief is to confirm the VAT treatment applicable to the provision of home care services where the provider is acting as principal in relation to the supply and to distinguish such supplies from the mere provision of staff. The status of home care providers is a matter of fact determined on the basis of contracts and/or the actual working and other arrangements that may exist between the home care provider and the recipient of the services, generally the Health Service Executive.

1. VAT treatment of consideration for the supply of home care services by a provider acting as principal.

If a home care provider is acting as principal in the provision of services closely related to medical care covered by section 61 or 61A of the Health Act 1970 as amended, and the home care provider is duly recognised by the Health Service Executive (“HSE”) under section 61A of that Act, such services qualify for VAT exemption under paragraph 2(2) of Schedule 1 VAT Consolidation Act 2010, as amended.

In order for home care services to qualify for exemption, the provider must act as principal and must be recognised by the HSE as a home care provider. The provider is also required to provide the HSE with the name and address of each person to whom they provide home care services. A “home care service” is defined under Section 61A of the Health Act 1970 as amended, as a service made available in a private dwelling for a person who, by reason of illness, frailty or disability, is unable to provide the service for himself or herself without assistance.

2. VAT treatment of consideration for the supply of staff by employment agencies to home care providers.

An employment agency is engaged in the supply of staff. Where such staff are placed with the HSE or a home care provider, the HSE or home care provider determines the hours of attendance, the place of attendance and the duties of the agency staff. If an employment agency is sourcing, placing or making available staff to home care providers or any other body, such supplies are liable to VAT at the standard rate in force at the time of the supply (currently 23 per cent). Tax Briefing Issue No 66/2007 sets out in detail the VAT treatment that applies in such circumstances.

Requirement to Regularise Position

It has come to the attention of Revenue that a small number of organisations, primarily employment agencies, are holding themselves out as home care providers in circumstances where they supply staff to the HSE and those staff are then deployed in the delivery of home care services. The supply of staff by an employment agency is liable to VAT at the standard rate, regardless of how those staff are deployed by the organisation to whom the staff are supplied. There are no circumstances in which the supply of staff to the HSE or a home care provider can benefit from VAT exemption under Paragraph 2(2) of Schedule 1 VAT Consolidation Act 2010, as amended. Suppliers operating in the home care field who have claimed an exemption under paragraph 2(2) of Schedule 1 should ensure that they meet the criteria set out in this eBrief and should, in cases of doubt as to the continued application of the exemption, contact their local Revenue District for further guidance.