With 1 in 4 of all private hospitals in England and Wales registered as charities receiving lucrative tax breaks, NHS hospitals have now begun proceedings in the High Court to achieve parity in tax status for business rates that are paid to local Councils.
NHS hospitals, in a landmark legal test case, are seeking to argue that they should be treated the same as charities, which receive mandatory 80% business rates relief, with a Judge set to issue directions in the case as early as today (Thursday 12th April 2018).
The test case, brought by 49 separate NHS Hospitals, including York Teaching Hospital NHS Foundation Trust with Norfolk and Norwich University Hospitals NHS Foundation Trust also spearheading the legal challenge, could save NHS Hospitals £292.95 million per year in business rates if successful according to real estate advisor, Altus Group.
Analysis of official Government data by Altus Group shows that the 1,379 NHS Hospitals liable for business rates in England and Wales had a combined Rateable Value of £611.32 million but that increased by 19.26% to £729.07 million under last April’s revaluation with NHS Hospitals paying £366.19 million per year on average in business rates under the revaluation representing a £62.82 million per year increase allowing for how quickly bills can rise and fall plus inflation.
NHS Hospitals in England and Wales, under the original 5 years of the 2017 revaluation, were set to pay a total of £1,830,934,480 in business rates (£1.83 billion) representing a 5 year increase of £314.10million although, at the Spring Statement last month, the Chancellor ordered the next revaluation be brought forward from 2022 to 2021.
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