Our Services

Contract Restructuring

01 Contract Restructuring

The Opportunity

“As the originators of this arrangement, VAT Solutions have demonstrated significant depth of knowledge in all aspects of applicable legislation and case law regarding ‘contract restructuring’ …. I cannot fault their ongoing commitment to achieving the best result for us”

David Manson, CEO, Keys Group

VAT Within the care sector has long been a challenging and significant cost for care operators. In times of ever-increasing cost pressures, the restructuring service offered by VAT Solutions presents a new opportunity to recover VAT on an ongoing basis. By creating the vehicle for taxable supplies (by means of a VAT group registration), we therefore provide a structure that streamlines, centralises and optimises the efficiency of the administration and management of a care operation’s local authority/CCG fee contracting process.

Not only does the new structure create considerable VAT savings for an operator, but also provides significant commercial benefits for the business in the form of improved efficiency and communication regarding local authority fees.

Learn more about choosing your ‘Contract Restructuring’ partner

The Benefits

  • Cost savings brought about by economies of scale
  • Increased efficiency and streamlining in the management and administration of local authority fees
  • Dedicated single point of contact for dealing with local authority and CCG queries
  • A specialist and more knowledgeable contract management/administration team better equipped to share best practice when dealing with local authority fee negotiations
  • VAT recovery on normal trading expenditure and capital expenditure
  • VAT recovery on purchases made before VAT registration
  • Retrospective VAT recovery on capital items, goods and services prior to VAT registration
  • Improved cash flow
  • Ongoing VAT advice, support and up to date care sector knowledge from our specialist team
  • Specialist VAT training for finance staff from a dedicated member of the VAT Solutions team
  • Available to private, charity and not for profit care operators


Will it affect my relationship with local authorities/funding bodies?

No. We have strong working relationships (and trust built up by over 15 years of positive dialogue and communications) with local authorities/CCGs nationally. ‘Contract Restructuring’ presents no negative impact upon funding bodies. We are sensitive to your funding streams and handle liaison and negotiation accordingly – our clients will testify that their relationships with local authorities and CCGs have not been negatively impacted in any way, and that their fee contracting process has actually been streamlined and improved by our restructure.

Will it affect what I charge my private fee-paying clients?

No, not at all.

How long does the process take?

From our engagement with you to the creation of a working VAT group, we estimate a 3-6 month time frame.

How does your fee structure work?

The technical and administrative restructuring element of the process, creation of the working VAT group, all related disclosure to HMRC and legal documentation, is carried out for a fixed fee.

Our fees for the implementation services we provide are contingent and are therefore reliant upon our successful implementation both in terms of our specialist skills converting existing exempt contracts with LAs/CCGs to taxable contracts but also in respect of the VAT services we provide in maximising your input tax recovery while remaining complaint with often changing and complex legislation.

This is a deliberate approach, reflecting our confidence in our ability to deliver, which enables our services to be rewarded and linked directly to the successful implementation of our work.

If we, like some providers, were to adopt a fixed fee approach it means that a fixed fee sum would then be payable by you, the client, regardless of whether the provider of the service identified large amounts of input tax or not. That fixed fee would be payable regardless of whether contracts were novated with LAs/CCGs or not and that same fixed fee would be payable regardless of whether HMRC accept the input tax on the VAT return or reject it. In addition, a provider offering a fixed fee is not incentivised to work above and beyond to achieve a successful outcome for their client. A contingent fee is equitable to both parties and is commensurate with the level of input tax being recovered. If the level of input tax is high, the fee reflects this but equally, if the level of input tax is not so high, the fee matches this and reduces accordingly. A fixed fee, however, is payable regardless of the level of input tax being recovered.

Do you get approval in advance from HMRC?

No – simply because there is no approval with HMRC for indirect tax. We make full disclosure to HMRC, and our restructuring work is fully supported by tax counsel and regulatory opinion. We engage with our clients for a five year period and, as such, are an expert extension of your finance and taxation team in respect of HMRC liaison, VAT advice and submission of VAT returns.

“We prepared and have regularly reviewed the VAT Solutions ‘Contract Restructuring’ arrangement, and have no hesitation in supporting its viability from a sector regulatory and legal perspective. Given the careful research and detailed, quality backing which VAT Solutions put into their work, and at a time when health and social care needs as much assistance as possible to sustain itself, then it is an opportunity which I would urge any care group to explore with them.”

Paul Ridout, Ridouts Professional Services Ltd.

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