Latest Public Sector News

26.02.16

NHS trusts demand backdated business rates discount worth £1.5bn

As many as 100 NHS trusts are demanding a backdated business rates discount worth £1.5bn, saying they are entitled to it as charities.

Property consultants Bilfinger GVA wrote to local authorities on behalf of their clients, saying they are charities instead of public sector-funded organisations, and are therefore entitled to the 80% discount on business rates available to charities.

The discount is worth £250m a year, and the trusts want it backdated for up to six years, meaning local authorities could have to pay £1.5bn.

A spokesperson for Bilfinger GVA said: “Following a concern raised by an NHS trust client, we have undertaken considerable research into the application of mandatory rate relief, and have sought legal opinion on the issue.

“As a result, we have made applications for relief on behalf of a number of our NHS trust clients‎.”

A spokesperson for the Local Government Association (LGA) said: “The LGA is supporting member councils who have received applications for mandatory relief from business rates on behalf of a number of NHS trusts and are working with them to consider the appropriate response.

“We have sought legal advice from counsel. We believe that NHS trusts and foundation trusts are not charities, and that the applications for rate relief are therefore unfounded.”

The news will be an additional burden for financially-strapped councils, who have warned they will have to increase charges, cut frontline services and dip into reserves to balance the books despite the government’s promised devolution of business rates revenue.

Comments

Scratchinghead   02/03/2016 at 15:13

2 Google searched have revealed: Under s 43(6) of the Local Government Finance Act 1988 charities enjoy 80% relief for properties used wholly or mainly for charitable purposes. It is not sufficient for the property to be owned or occupied by a charity; the property must be used for carrying out a charitable purpose. An NHS Trust is an organisation, a legal entity, set up by order of the Secretary of State under section 25 of, and Schedule 4 to, the National Health Service Act 2006, to provide goods and services for the purposes of the health service. The provision of “goods and services” doesn’t sound particularly charitable to me. Though I’m sure the lawyers will disagree.

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