Hospital trusts in legal bid over tax

STRUGGLING NHS hospitals could save nearly £300million a year over a landmark court case.

A group of 20 hospital trusts has launched a legal bid for business rates relief against 49 local authorities.

The trusts are seeking the same treatment as private hospitals for tax relief.

More than one in four of all private hospitals in England and Wales are registered as charities, allowing them to enjoy 80 per cent relief on their business rates bills, while NHS counterparts are hit with crippling hikes after the recent tax overhaul.

There was a preliminary hearing of the case yesterday for a judge to issue directions.

If successful, the legal challenge could save NHS hospitals £293million a year in business rates, according to real estate adviser Altus Group.

Threaten

But the Local Government Association, which is supporting the councils involved in the case, has warned the legal bid could threaten the financial viability of some local authorities.

The LGA has already reportedly branded the hospitals’ challenge as “corrosive”.

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

The hospital trusts involved in the case, represented by law firm Addleshaw Goddard, include York Teaching Hospital and Norfolk and Norwich University Hospitals NHS Foundation Trusts.

NHS hospitals are forking out £366million a year on average in business rates – a hike of £62million following the revaluation last April, according to Altus.

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