Welfare services

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Welfare services
  • What are welfare services?
  • Organisations covered by the exemption
  • Charities
  • Public bodies
  • State-regulated private welfare institutions and agency
  • Intermediaries
  • What services constitute treatment, care or instruction?
  • Can routine tasks be exempt from VAT?
  • Protection and care of children and young persons
  • More...

Welfare services

This guidance note covers the VAT treatment of welfare services. This note should be read in conjunction with the Welfare ― supplies of advice and information and Welfare ― supplies of staff guidance notes.

What are welfare services?

Welfare services are services directly connected with the following activities:

  1. the provision of treatment, care or instruction designed to promote the mental or physical welfare of the following people:

    1. sick

    2. elderly

    3. disabled

    4. distressed (excludes unemployed)

    5. the protection and care of children and young persons (VATWELF3030)

    6. provision of spiritual welfare by a religious institution if it is provided during a retreat or course of instruction (it must not be designed with the primary purpose of providing a holiday or recreation)

Organisations covered by the exemption

The following organisations can exempt welfare services provided to eligible people:

  1. charities

  2. state regulated private welfare institutions and agencies

  3. public bodies

Welfare advice and information provided by one of the above organisations is liable to VAT at the reduced rate. For more information, see the Welfare ― supplies of advice and information guidance note.


The provision of welfare services by charities are exempt from VAT.

The charity must either be registered with the Charity Commission or have been formally recognised by HMRC as a charity for tax purposes.

It should be noted that some welfare services provided by a charity are not treated as business activities and may therefore not be treated as an exempt supply for VAT purposes. For example, under a concession, if certain qualifying goods are supplied by a charity

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