NHS tax loophole flies in the face of government drive

(16 March, 2017)

"You can’t blame NHS Trusts for searching for each and every saving possible. But it does sit somewhat uncomfortably with a public-funded organisation seeking tax loopholes through private subsidiaries"

8724A&E at King's College Hospital

The Government is under fire for cutting funding to health services, yet somewhat bizarrely, it has created a tax loophole that allows NHS Trusts to save on VAT. Why?

Is it because NHS Trusts are on their knees with soaring demand and the government’s insistence on a seven day NHS? So by giving a sop such as this, it takes a bit of heat out of the funding debate? Or is it ideologically-driven? Yet another part of the NHS that falls into private sector hands.

Certainly it isn’t for the benefit of staff – as we report this week, King’s College Hospital staff fear that the trust’s tax-saving ‘privatisation’ scheme could undermine their pensions and cut maternity-leave pay. King’s deny this.

KCHT will apparently save £7million from their VAT bill by transferring the procurement staff, technicians and health care assistants to a private subsidiary company ‘KCH Interventional Facilities Management’ – and who wouldn’t try to make a saving of this magnitude?

Documents seen by this paper also suggest that the scheme will free up clinical staff from ‘managing supply chain activities’ to spend more time on patient care and improving the quality of services. Why this should be so, it doesn’t say – and King’s made no mention of this in their response to us. It would be interesting to learn how outsourcing procurement to a private, tax-saving company helps in this regard.

You can’t blame NHS Trusts for searching for each and every saving possible. But it does sit somewhat uncomfortably with a public-funded organisation seeking tax loopholes through private subsidiaries – not to mention the inconsistency of a government that has vowed to ensure that organisations large or small pay their fair share of taxation.


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