Forum Topic

NHS pays business rates on its properties

The NHS does have to pay business rates on its properties, while private hospitals that are registered as charities can save up to 80% on that particular tax. A business rates company projected last year that the then-upcoming revaluation (where the tax bill was recalculated for eligible properties) might mean the bill for NHS hospitals in England and Wales could increase by 21% (though amended figures indicate a 24% increase in 2019/2020 compared to 2016/17).https://fullfact.org/about/contact/The obvious question must be why NHS hospitals pay business tax?  Also, could NHS hospitals register as a charity or charities?This does not seem fair to me, at all.

Ivonne Holliday ● 2683d11 Comments

I suppose public services such as the NHS don't qualify  as a charity?

Lucille Grant ● 2683d

Perhaps, but does the NHS qualify as a business?

Ivonne Holliday ● 2683d

Business is a loose term for anything thats not a dwelling house. There us a private members bill ,held up by brexit, to debate whether this should be changed. Although if you lose that income then presumably someone else will pay more to make up the shortfall. Incidentally about 20% of private hospitalshave charitable status.

Andy Pike ● 2683d

Errr the government gives the nhs money, they then pay some back as business rates, surely it makes no difference - just one arm of the government transferring money back and forward.  If they didn’t pay could we pay less taxes/ borrow less from our grandchildren.towards the cost of running the nhs?Not sure I see the point.Incidentally on private hospitals, these save the nhs money as people having operations privately don’t otherwise need to be treated on the nhs.

Mike Warman ● 2683d

The point being, perhaps, if the government gives the NHS money and a (great chunk I expect) is paid back as business rates, then the monies the government gives to the NHS should be quoted as much less.Question:  does the Council collect business rates?The initial query was not against private hospitals by any stretch of the imagination.  The question was why private hospitals can be charities and the NHS cannot.

Ivonne Holliday ● 2683d

Ivonne,The NHS will also pay the hmrc large amounts in employers national insurance contributions I think, probably in VAT on various supplies (are medical devices and drugs VAT exempt?) and also, although not quite the same, collect and pay tax and national insurance for their employees through PAYE.I think it is a fair point to make that the cost of running the NHS could also be shown net of these taxes.  I would guess the business rates is the smallest of the them by some margin, but in likelihood in total they are unlikely I would have thought to add to more than 2 or 3% of the budget.I agree that the amounts could be shown though for clarity.  There is much obfuscation around these things so more disclosure and clarity good

Mike Warman ● 2683d

Hello Mike,I am not surprised that the NHS pays its share of national insurance as well as collecting and paying tax and national insurance for their employees. But business rates? Somehow I find these difficult to digest.Perhaps behind all this is the sour taste of what happened with Queen Mary's Hospital.  The developer who built the new hospital was charging something like £1M a year to the hospital till the cost of its build was paid off.  I very much doubt that the builder paid the NHS a penny from the profits of the development and sale of houses and flats in the site of the old Queen Mary's hospital.

Ivonne Holliday ● 2683d

The NHS would have sold the development site to the developer the deal may ie may or may not have included a share of the profits but that would depend on what deal was agreed. When you sell your house do you get a share of any profit your buyer makes when he sells on??

Andy Pike ● 2683d

Hello Andy,When I sell my house I do not get a share of the profit, I get the profit of selling my house compared to the price I paid for it plus the mortgage I have been paying since.But, Queen Mary's Hospital was left to the nation by the Russell family provided it was a hospital.  You may be aware that Douglas Badder was treated thereWhat I find a problem with is, if the hospital was left to the nation, why did the developer "reap" the rewards?

Ivonne Holliday ● 2683d

It is still a hospital and a grateful nation cashed in its surplus areas by selling on for development.And yes I am aware that Douglas Bader and many others ,including my sister, were treated there either in the limb replacement unit or its excellent burns unit.

Andy Pike ● 2682d

We dont know what the terms of sale were. Firstly the nation would have reaped the rewards ( your term) from the initial sale and secondly if the NHS values were on the ball they could have included a share of profits clause for all profits over a set amount. And there is no doubt the new modern hospital is far superior to the dated largely single story expensive to maintain old building.

Andy Pike ● 2682d