Financing Decisions in the Care Sector – Why Tax Matters
13/04/26
When considering financing arrangements, the focus is often on the cost of borrowing and availability of funding.
However, the tax treatment of financing costs is an equally important consideration.
In particular, the availability of tax relief on interest can vary depending on:
- The level of borrowing within a group
- The group’s wider structure and activities
- The application of the corporate interest restriction rules
As groups grow or take on additional debt, positions that were previously efficient may change. In some cases, interest may no longer be fully deductible, increasing the effective cost of financing.
Understanding these factors in advance can help ensure that financing decisions remain appropriate as groups expand and circumstances change.
We will be discussing this at the Care Show and would be pleased to speak with you about how these issues may apply to their businesses.
