NHS call for equality over private hospitals’ tax break
NHS trusts are calling for equal treatment on business rates after research revealed private hospitals get discounts worth £52m over five years.
A study suggests more than one in four private hospitals are charities, giving them an 80% rebate in business rates.
But NHS trusts all have to pay in full, and will face a £300m increase in rates over the next five years.
University Hospitals Birmingham Trust, the worst hit, is appealing against a rate rise of more than £2m this year.
A spokesman for the trust, which operates the Queen Elizabeth Hospital, said: “The trust believes there is an anomaly in how NHS trusts are treated for business rates when compared to other organisations such as universities, charitable care facilities and private hospitals.
“NHS Trusts receive no additional funding to offset business rates costs.
“We are therefore, alongside other NHS trusts, part of a long-running challenge to seek a similar level of charitable relief on business rates, similar to non-profit organisations.”
Research using Freedom of Information Act requests by CVS, a property valuation company, suggests that about 27% of private hospitals receive business rates relief.
Local authorities reported that 123 out of 457 private hospitals were charities, allowing them the 80% rates reduction. No information was provided for a further 169 private hospitals in England and Wales.
CVS calculates that the 626 private hospitals would have been expected to pay a total of £241.4m between them. But accounting for the institutions that are known to receive the discount for charities, the company expects them to save £51.9m.
Nuffield Health, whose income makes it Britain’s third largest charity, is expected to pay just £3.2m over the next five years, saving £12.7m because of its charitable status, according to the CVS analysis.
Mark Rigby, chief executive of CVS, said: “It is iniquitous that NHS hospitals pay normal business rates but 26.9% of private hospitals, using charitable status, receive an 80% discount.”
While the government has announced plans to reform business rates, Mr Rigby said “this must include all reliefs and the current inequalities that exist within the system”.
Dozens of NHS hospitals wrote to local authorities last year to try to claim the reduced business rates, but the Local Government Association rejected the claim, as they are not charities in law.
The revaluation of business rates, which came into effect in April, has increased NHS hospitals’ tax bill by 19% to £366m a year.