I don't give a great deal of attention to Council Tax here. Peter May at Progressive Pulse (of which I am the director) does. He posted this yesterday:
It seems to have received little publicity but I have to say I'm pleased that the government is going to be taken to court over rates bills.
Apparently:
Hospitals in England and Wales will pay a combined £408.6 million in business rates this year — a rise of 42.8% since 2017 when the Government carried out a revaluation of all commercial premises, research by rates specialists Altus Group.
Private hospitals are not businesses but charities so are unsurprisingly exempt from business rates. Yet surely NHS hospitals are not businesses either?
It is another example of a purposely skewed unlevel playing field where the NHS is looked upon to ‘compete' with private hospitals but with automatically higher overheads. It is contrived legislation.
Moreover:
Private schools also benefit from the tax break, along with Free Schools — although local authority schools still have to pay rates.
This is another topsy turvy regulation — the more you run your school along business lines the less you have to pay business rates.
And all this legal action is basically the government suing itself because they all think that money is short.
Deception and misunderstanding is complete. Even branches of government don't seem to realise who creates money.
And if the government fails to resource local authorities adequately as it is now doing, local authorities might be even worse off.
And all the idiots in government can talk about is Brexit.
They seem unaware that charity begins at home.
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“Never attribute to malice that which is adequately explained by stupidity”
I don’t think our neoliberal government is stupid by any means. They know exactly what they are doing, and the more they can show the NHS is costing more than the private equivalent, then the more evidence they can present for full privatisation. This is malice through and through.
On a similar line, Boots charged £1,500 for single pots of moisturiser. *shock* . *horror*. No, of course not, NHS, as a publicly funded service is never going to run out of money. But by an additional £1500 appearing on the accounts , for something that usually costs £2, will again, just be more evidence the Tories have for privatising it. Since Boots CEO Sebastian James, a former member of the Bullingdon Club, The £1,500 per pot of moisturiser is simply a gift from the tories to tory friends, while making the NHS appear more inefficient and in need of sell off.
Right in principle: some thoughts: 1/ as you probably know, business rates are 80% deductible for charities – the next 20% is discretionary and subject to Local Council agreement.
2/ Apparently, around 27% of private hospitals are charities https://fullfact.org/health/nhs-and-private-hospitals-who-pays-business-rates/ – so the comparison is not all of them v NHS.
3/ Obviously, government is happy to transfer money through NHS and schools etc to the business rates system rather than fund business rates directly. It is a transfer system in operation – sleight of hand, maybe, but NHS funding is ‘managed’ on this basis. It would need some further analysis to understand the repercussions of doing away with it – especially on the local government sector which is massively underfunded.
4/ The whole charity sector needs review – why are some hospitals (27%) charities? Why are private schools? Why do Academy schools have exempt charity status?
5/ At the top level, there seems to be a lack of overall understanding of the issues and ramifications and it appears wrong that a private hospital if it is a charity can have tax benefits not available to the NHS. Of course, how the NHS has its budget set to incorporate such costs (as many schools) is another issue but connected as per 3 above.
Thanks Jeff
And why are religious orders charities?
The real issue is Charitable Status legislation. In my naive way I thought charities were set up to help people in distress – mental, physical, health, social, financial etc – and that they provided their services essentially for free.
In fact, “public” schools were originally set up as free schools for the poor – until they were captured by the rich. To call them “charities” because they sometimes allow the plebs to use their playing fields would be like the Trussel Trust’s mainly delivering gourmet meals to the well-off at mouth-watering prices and occasionally giving a couple of parcels to the truly distressed and calling that “public benefit”.
I suspect Jeff is right about business rates, sleight of hand etc, but is that the way it should be done? I doubt very much that the NHS receives an additional amount to pay its rates; more likely it’ll be like the BBC having to fund free TV licences out of a finite financial settlement. Or is that too cynical?
Any organisation which charges the bulk of its clientele huge fees cannot be a charity.
‘Skewed’ is the least that could be said if this issue.
Socialism for the rich – again.
I seem to recall that there is a similar sort of issue over the NHS and VAT – if I understand correctly, the NHS is VAT exempt, and thus has to bear the VAT on anything it buys, whereas any contractor can be VAT registered, and recover it, which distorts the relative apparent costs… Doubtless someone can correct me, or explain better.