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Regulatory changes affecting VAT and international recruitment introduced during 2025 are now having a direct impact across the corporate social care sector. These developments arrive at a time when many providers are already operating under sustained economic pressure.
Care organisations continue to face rising operating costs alongside long term under funding increasing demand and ongoing workforce shortages. Against this backdrop further regulatory intervention has intensified concern across the sector and prompted renewed calls for meaningful support.
Nadra Ahmed Executive Co Chair of the National Care Association has been vocal in calling for increased funding. She founded the Providers Unite movement and helped organise a London march involving around 3,500 care providers to raise awareness of the challenges facing social care and the urgent need for greater government investment.
For several years some social care providers used VAT grouping arrangements to recover VAT on costs that would otherwise be exempt. HMRC has since stated that this approach represents tax avoidance and has launched a programme of reviews and investigations into its use.
This has placed many corporate care organisations under additional financial pressure with rising tax liabilities emerging at a time when margins are already under strain.
Workforce shortages have been a persistent issue within social care driven by low pay levels and limited domestic labour supply. As a result many providers have historically relied on overseas recruitment to meet staffing demand.
Temporary measures introduced after the pandemic made international recruitment more accessible for the care sector. Legislation effective from July 2025 has now closed the social care worker visa route with the government citing widespread abuse and exploitation.
Alongside this change salary thresholds for skilled worker visas have increased skills requirements have risen to RQF Level 6 and further tightening of English language standards has been signalled.
Government guidance now encourages providers to recruit through regional care partnerships or invest in training resident workers to move into new roles.
The sector response has been clear. Martin Green OBE Chief Executive of Care England described the changes as a severe blow to a sector already operating on fragile foundations.
Insurance alone cannot resolve structural funding or workforce challenges. Specialist brokers can however play an important role in helping care providers assess risk and control insurance spend.
There are early signs that the insurance market for social care is softening with improved capacity and more competitive pricing compared with the hard market experienced during the pandemic.
For providers facing pressure from multiple directions this presents an opportunity to review cover reassess risk exposure and explore potential savings. The most effective outcomes tend to come from open dialogue with a specialist broker who understands the care sector and recognises that each organisation carries a unique risk profile.
At Quality Care Group our focus remains on supporting care providers through informed advice sector insight and long term partnerships that reflect the realities of operating in today’s social care environment.
If your organisation is being affected by regulatory change rising costs or recruitment pressure our specialist care insurance team is here to help. We work with care providers to review risk identify cost efficiencies and ensure insurance arrangements remain appropriate as the sector continues to evolve.
Complete our short contact form and one of our care specialists will be in touch to arrange a no obligation conversation.
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