Supporting Those Who Care: Tax Incentives for Care Homes

November 11, 2024

If you operate a care or nursing home, it’s crucial to understand the tax incentives available to help you optimise finances and reinvest in quality care. In this month’s blog, we explore valuable tax reliefs that can significantly impact your bottom line, including capital allowances for specialised equipment, retrospective energy cost claims, and other often-overlooked tax benefits. From nurse call systems to patient lifts, many assets qualify for tax deductions, which can ease operational costs. Bonham & Brook specialises in maximising these claims, ensuring you capture all eligible reliefs and can reinvest those savings into the high-quality care your residents deserve. Read on to discover how our expertise can help you maximise these financial benefits and stay compliant with tax regulations.

 

Capital Allowances

The first relief we look to is capital allowances, with care homes containing substantial amounts of embedded plant and machinery. Whilst accountants do tend to make capital allowances claims on care homes, we do sometimes find that there are items of plant and machinery which might be overlooked when claiming on build and refurbishment projects. Likewise, we find that claims are often missed on property acquisitions in particular, due to there being no itemised breakdown of the assets within these properties.

 

So, where do Bonham & Brook come in?

We can support our clients on property acquisitions (which you can read about in our S198 election blog here), additionally we can look at historic costs on refurbishments, build projects and property acquisitions.

As a specialist we’re able to break down grouped costs of plant and machinery, and attribute costs to the appropriate assets which qualify for capital allowances tax relief. This is particularly useful when looking at historic projects, where there may be some pieces of information missing, or which are providing difficult to obtain.

Not only this, but our team has extensive experience of claiming capital allowances within care homes and are therefore able to identify more niche items of plant and machinery which may not be picked up within standard claims.

Some examples of the more specialist plant and machinery are below:

  • Nurse call systems
  • Wet rooms and specialist baths
  • Patient lifts and hoists
  • Sluices and specialist sanitary equipment
  • Safety equipment such as window restrictions
  • Door entry systems

 

How much could we be looking at claiming?

Claims will always vary on a case by case basis, however we typically find that around 60% of refurbishment costs, 25% of purchase costs and 35% of build costs can qualify for relief.

 

Do we have any deadlines?

Technically no, you can claim on historic expenditure providing you can evidence the costs, and the relevant plant is still in situ in the property. However, if you want to maximise the relief available up front, then you’ll want to claim before the deadline to amend your tax year, as you can then utilise reliefs such as the Annual Investment Allowance and Full Expensing.

 

Are there any additional reliefs available?

There’s an opportunity to claim CCL relief; in short, the residential energy costs of a care home (i.e. the costs for the gas, heating and water supply to the rooms), should be charged VAT at the reduced rate of 5%. In qualifying for this reduced rate of VAT you should also qualify for the CCL exemption. This can be done as a retrospective claim for past energy costs, as well as for future energy bills. Therefore, if you already own, or are in the process of acquiring a care home, we can provide additional support here.

Likewise, any time an energy contract is renewed for a care home, this presents an opportunity to make a CCL claim, so this is a further way in which are able to add value.

 

Maximising Tax Reliefs for Care Homes

Maximising tax relief opportunities can make a significant difference in the financial health of care homes or nursing homes. By leveraging available incentives like capital allowances and energy reliefs, you can unlock substantial savings to reinvest in resident care.

Contact Bonham & Brook today to see how our specialist experts can help you capture every eligible benefit and strengthen your care home’s financial foundation.

If you are interested in learning more, please contact us on 020 3523 9125 or email info@bonhamandbrook.co.uk.

 

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