NHS trusts in legal bid over £300m business rates

Twenty NHS hospital trusts have launched a legal bid for business rates relief to save under-pressure hospitals nearly £300 million a year.

Court proceedings against 49 local authorities have begun, calling for action to treat NHS and private hospitals the same in terms of tax relief.

One in four of all private hospitals in England and Wales are registered as charities, allowing them to relieve 80% on their business rate bills, while NHS hospitals have faced recent increases in the recent tax overhaul.

If the case is successful, the NHS could save £293 million a year in business rates.

Labour’s shadow minister for local government Jim McMahon told the Commons last month that councils had put aside £1.6 billion for backdated payments over six years in case the appeal is successful.

It could also open up a raft of similar cases over controversial charitable status, in particular for state schools.

The hospital trusts involved in the case include York Teaching Hospital NHS Foundation Trust and Norfolk and Norwich University Hospitals NHS Foundation Trust.

NHS hospitals are forking out £366.2 million a year on average in business rates – a hike of £62.8 million following last April, according to Altus.

But private hospitals are enjoying a £52 million tax break on their business rates bill over the next five years through their charitable status.

Free family law consultation