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HMRC internal manual

VAT Welfare

Welfare services: services directly connected with the provision of care, treatment, or instruction - children and young persons

To identify whether the service amounts to welfare, you will need to consider both the nature of the service and the status of the person cared for. When looking at services related to the care and protection of children and young persons consideration should be given to activities related to the looking after of the individual child or young person concerned rather than children in general.

The Childcare Act 2006 defines childcare as any form of care for a child including education or other supervised activity. The Office for Standards in Education (OFSTED) factsheet provides guidance on what childcare services require registration.

Compulsory or voluntary registration with OFSTED does not automatically mean that the services being provided are exempt. Exemption is based on the nature of the services being supplied. As above only services that are directly related to the care and protection of specific children, rather than children in general are considered exempt.

Examples of exempt services include:

  • care provided in a childrens home
  • day care services such as those provided by a nursery, playgroup or after school club (but not activity based clubs such as dance classes etc)
  • the placement of a child with foster carers by a fostering agency
  • the care, support and protection of looked after children.

The attendance of children at activity centres, participation in football lessons or dance classes and the provision of tuition. Are examples of activities that do not constitute the provision of care and protection services to children and young persons.