VAT on private health

[Simonandrod]

Am I right in thinking there isn't VAT on private health care? Is it completely unfeasible that it could be put on and money raised go to NHS? Or is it too complicated as so many people who use it have health insurance? Just interested

The current waitlist is so huge, I am not convinced those using private healthcare decanting to the NHS would make that much of a difference. They should have at it. The system needs deep reform and the current solutions being put forward is more of the same. No new ideas

I suspect it is because - even with more money everyone knows more people need to pay more individually to use the NHS to manage demand. It needs to happen - it is just a matter of when and how.
VAT on private healthcare may actually be a good way to start the conversation of paying towards healthcare like in the Australian model

I believe it’s actually part of the complex negotiations that were made with the medical profession when the NHS was founded. Consultants were “allowed” to still do lucrative private work alongside their work in the NHS. If the govt of the day hadn’t allowed this, the NHS wouldn’t have had enough staff. The Drs union (BMA?) is very very powerful and vocal. I doubt very much that the govt could force NHS consultants to work exclusively for the NHS. (I don’t think you can force anyone to work in a particular place - if all private schools closed tomorrow, many of the teachers would not move across into the state sector, that’s a fantasy. If they wanted to work in the state sector they would do already. Similarly with consultants.)

You just have to look at how Keir Starmer has backed off reimposing the cap on pension funds - Jeremy Hunt lifted this for all workers, but it was specifically to address the problem that NHS consultants were retiring early/refusing extra shifts, because otherwise they got a heavy pension penalty. Labour would have faced exactly the same problem if they reimposed the cap and Drs had been quite vocal about this. Starmer thgt he cld carve out a special tax deal just for higher paid NHS staff and public sector workers but has clearly discovered that that’s not workable.

I’ve gone down a bit of a side issue, but my main point is that I don’t think VAT on private health care as a 1st step to abolishing private health care will find any support in the medical profession and it would be a brave politician who took that on. Yes, the arguments you can make are the same as for VAT on private school fees - so if you are for/against one you should, logically, be for/against the other - but a lot of powerful people in the NHS also want a thriving private sector.

Using private healthcare is in reach of more people than private education. Lots of people have medical insurance through work and even more have paid for one off or a series of appointments for a particular health issue. So therefore they tell themselves it’s different and it’s ok. No it’s not different because it’s ‘lifesaving’, it’s often not.

I think if private schooling was in their reach, many of these people would use that to, and probably not be in favour of paying more for it. But whilst it remains out of their reach, this policy will remain a vote winner for Starmer because of people’s spite.

My kids were/are at state school, but I don’t agree with the VAT on private schools because I don’t think it’ll benefit anyone and has the strong potential to make things worse.

This - in a nutshell

You make some interesting points. VAT on school fees is popular because most people won’t be paying it. VAT on private medicine seems less popular (at least on this thread) because more people would have to pay it. If Labour were proposing to add VAT on all private education ie schools, tutoring, holiday courses, universities - all of which people pay for for their own children, to benefit/advance their own children, but are not affordable to everyone - I very much doubt it would be so popular. It seems people are in favour of extra taxes on other people. And if someone can afford something that I can’t, it’s because they’re “rich” and therefore it’s only fair that they should pay more tax etc etc (I think it was Dan Neidle, tax expert, who shared some research on taxes which showed a majority said they were prepared to pay more tax, but when asked how much more, most people said £25 or less per year!!!)

The harsh fact is that we all need to pay a lot more tax because all the public services - NHS, schools, roads, you name it - need more money. But none of our politicians are addressing this. Whoever is in power after the election is going to have to massively put up taxes.

Well private schools need to think about that. The fees have risen far far above inflation pushing it out of the reach of so many and then you have a small sliver of the population in the support. They have themselves to blame. It wasn't always so

It's basically the same argument as taxing privately provided education. So we shouldn't be surprised to see that people are now making that argument, this is the stated policy of the party of the people.

Generally taxing health care and education aren't things civilized countries do, but go UK I guess.

Yes!

Yes it's IPT and it's 12%

You might die from one if you're not treated sooner enough but you definitely won't from the other. Are really trying to compare life and death to going to a private school?

IPT- Insurance premium tax has gone from 6%in 2011 to 12% now.

Medical inflation- the costs of drugs and operations have risen massively too

The cost of private insurance is becoming so high that many individuals and companies are forgoing it, I work in this industry...sales on a downturn!

How is it equitable? They are already paying tax for public healthcare, at a rate appropriate to their income level. If they are high earners that means they are already paying more than those who are struggling, by quite a lot.

Then instead of taking up space and money in that system, they are paying extra for their own care.

This saves the NHS money as it is, but aside from that, how is it "equitable" to make them pay more than anyone else, beyond their tax bracket? What does equitable actually mean in your mind here?

As I said before - doesn’t this make private healthcare much more unfair than private schooling? If one person can pay for something that means life or death, and another can’t, that contributes far more to inequality than different schooling, surely.

Good point. Things can never be fair. Far fewer people can access private schooling and those who can and are forced to state clearly have more means than most - so can tutor, homeschool, send to beautiful camps and nurturing ECAs. Their kids will still thrive above the average.

A far larger demographic - especially now - are accessing private healthcare. You also have a strong medical lobby who only came into the NHS on the condition they can practice privately. It will be a very brave government that messes with that. Doctors are mobile and wanted all around the world - there would be an exodus. It is a non-starter

My child is in private because I wasn’t prepared to wait 3 years for a diagnosis followed by protracted battle for appropriate support in state. Ultimately I wasn’t prepared to submit my child to unnecessary trauma when we have the resources to provide otherwise. I imagine you felt the same when you chose private medical care.

Yes. Definitely comparing.
What about for example people getting adhd assessments privately for their children and skipping the queues which I believe run into years.
No VAT on that and bestows a huge advantage with extra time in exams etc.getting the right meds and support
Private heslthcare is very much not just about life or death... you're being far too emotive about it

Well I think most people recognise that the NHS is in need of more funding which will be difficult to achieve without major tax increases. VAT on private health insurance would not raise that much but it would help fund the NHS a bit.

On an equally basis why should rich people with private health insurance have an earlier diagnosis and better chance of success in treatment than someone whose need might be greater or are in more pain have to wait months and months for a diagnosis and treatment.

Lastly it's only 20% on a private health insurance cost of around £4k a year and quite frankly if you can afford private healthcare then there should be no problem in paying an extra 20%.

Ok, so you’re saying tax on private healthcare would be unworkable whereas tax on private schooling is workable in practice.

At least that makes sense as an argument!

Some PP are trying to argue that private healthcare is fair, because health is much more important than school. This makes no sense. If health is much more important (and of course it is) then private healthcare is more unfair, not less.

Always a race to the bottom.

Precisely. The ability to pay to get your health (and often livelihood) back is of course far more important and crucial. So equity there is of the utmost important

Twas Martin Luther King that said 'of all the inequalities, health inequality is the most inhumane' and he is correct.

However- precisely for that reason and others - no political party will float banning private healthcare/VAT or private or be seen to squeeze it. Especially in the current climate

It isn't about equity - just smart political choices

Exactly far more unfair.

I don’t think that anybody is saying private healthcare (which has created a two tier system) is fair. Due to the state of the NHS significant amounts of people are however being forced into using it. It has become a necessity rather than a luxury in many cases and unless things in the NHS rapidly improve (which they won’t, it’ll take time) all a rise in VAT will do is make it prohibitively expensive for many people and increase the load on the public system.

Won't happen - for all the reasons discussed. Fairness is everyone paying more tax (everyone, not just the 'rich') and more people becoming net contributors.

And ultimately a new model for the NHS, where users pay towards use at point of care

Why, so even more children have to suffer and wait in pain?

All that you say can be applied to private education too