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

It depends. Perhaps, it could be argued, that the builder is adding value to your house. The problem is, a lot of these 'luxury' items, like cars, aren't really luxuries for most people any more. The fact is, when it was first introduced, it wasn't intended to be a tax on very basic items (like essential food) that we want people to be able to afford. I'm sick of being taxed every time I fart.

Repeat for those at the back!

Imagine you have a health condition causing immense pain every day of your life and you've been told you have to wait two years for the op, of course you would jump at the chance to pay to have it done straight away.

Not at all comparable to the 7% of parents who choose to blow money on a fancy school when their kids could easily just go to a regular one.
Oh and I get that your only local school might be a bit rough wherever you live, but it's still not comparable to the chronic pain some people are in. Something you have to actually experience to understand I guess.
You can't compare schooling to healthcare

But the conversation is about whether encouraging people to go private helps the state system, not about whether you have sympathy with people doing that or not.

Your post doesn’t make sense because that’s not what happens.

People going private frees up capacity in the NHS and provides it with tax revenue that can be spent on others. Nobody in an NHS queue gets bumped further down if someone else goes private. The queue is actually shorter for NHS patients because some who are entitled to NHS treatment go private. The provision is separate.

Like all these issues it's more nuanced than that.

The stuff I've had private healthcare for (endometriosis, varicose veins, plantar fasciitis, back injuries) wouldn't have killed me most likely, "just" made me miserable, immobile, in pain and probably driven me out of the workplace.

Regarding education, the collapse of the SEN system has meant any parent who can possibly afford it is looking towards the private sector rather than tolerate their child not getting a suitable education or no education at all.

Local authorities are paying for some of it because there aren't enough of the right kind of schools and there aren't the staff either.

These are not the private schools one would consider "fancy" (incidentally most of those rely on endowments that pre date the moden education system).

My London Borough has 20% of its SEN kids going out of Borough to be educated, and that's just the ones they know about. They also benefit from a lot of private schools locally meaning most years they are short of 100 or so primary places not the multiple of that they'd be short without the private primaries.

These systems are intertwined. Mess with them in an ideologically based way at your peril!

Except they're using the same doctors and jumping the queue.

I was quoting someone who said putting vat on private healthcare would be just like putting vat on private schools. Somewhere early in this thread, I haven't read the most recent pages but it's obvious this is just another thread made to complain about vat on private school

I just think it's a very very stupid comparison for multiple reasons

By "interesting", do you mean extremely repetitive and tedious?

Probably doesn't.
Many senior drs don't work full time for the nhs due to the tax and pension implications, if they work over a certain amount they don't gain much.
So they work a percentage of time for nhs. And their private work they put through a limited company to pay less tax.

If the tax system was less onerous on high earners, more senior drs would work full time in the nhs.

Also, same if patients were more respectful. I have always worked in nhs as believe strongly in equality of care. But the impact of the daily abuse and poor compliance, no shows and time wasting on my mental health becoming too great.

My friends who work mainly or solely in private practice are not paid a huge amount more, but have a better work life balance, receive more respect from their patients, feel their time is more productive as they are listened too and have better mental health as a result. And its becoming more attractive by the day.

Improve the tax system, and crack down on abusive behaviour and poor compliance, and you will see more drs working full time for the nhs.

🤦‍♀️No, they are not jumping a NHS queue.

They are not using NHS time. Doctors do their contracted hours for the NHS, seeing NHS patients only during that time (they don’t sneak in a couple of private patients on the sly!). Outside of that time, they do their private work - during time the NHS is not paying for!!

If a Dr works 40 hours for the NHS and another 20 privately, NHS patients are not being shortchanged of that 20 hours, because the NHS isn’t paying for them. The 40 hours they are paying for is what they get.

This is so baffling. We live in a capitalist world where money will allow you to jump queues all the time. If you've been at an airport or theme park you will physically see people doing this every day of the week. It's part of the economic model and actually allows more money to enter a sector and often makes the service or provision more affordable to the poor. If you think of a theatre, they can afford to charge £40 for some tickets because somebody has paid £250 to sit on the front row.

Private health care is complicated because people aren't jumping the queue but forming a different queue that can only be joined if you are prepared and can afford to pay. It is not the case that every private procedure performed lengthens the NHS queue by one space but it is the case that the NHS queue size will reduce by one space. There is undoubtedly some resource overlap between the private and public sector resources but it isn't the case that removing the private sector would mean that the same number of patients would be seen but all on the NHS. The NHS waiting lists would get longer for everyone and we would be worse off.

I don't think there should be tax on either education or health.

Listening to what the medical professionals on here are saying, I still think it’s a good idea to tax private health care. It sounds like people will still pay for it and like doctors work for private health via private equity companies or their own firms to pay less tax?

And that they won't move away, we’ll just see better NHS provision.

The adults in the room know that everyone needs to pay more for the services everyone wants. As someone upthread said, it’s like going to Alton Towers, you can pay through the nose for a fast pass or have a good time in a reasonable queue because enough people are prepared to pay for the fast passes.

Labour seem to be opening the door to bigger taxes this not by sticking tax on everyone but just on those who want a faster or better service and private healthcare or schools is the start point I guess for evening out the two tier systems.

A lot of people are saying that Drs do private work in their 'free time' and therefore it doesn't impact the NHS but free time is a nebulous concept and can expand or retract.

What I see with my own eyes on a daily basis in my field is colleagues either reducing their NHS hours and increasing private work or going full time private. It's happening so much more now than it used to. Private medicine absolutely does reduce the capacity of the NHS and I am sure this would be by more than it saves especially given what I have said about the private sector cherry picking the easy cases

Even if it is taking patients out of the NHS queue I still have a problem with it because of the inverse care law where those who need the care the least are most likely to get it.

It is a mixture of push and pull factors. There is more demand for private healthcare now. There are also terrible disincentives to working in the NHS particularly the crazy and bizarre pension tax arrangements and the poor day to day working conditions (I don't have an office any longer for instance we are all hot-desking now)
Financially it's a foolish decision for me not to do private work but I have always believed there is more to life than money.

The Tory government wants the NHS to fail because they all own shares in private healthcare companies or have mates who do. They have done nothing to tackle this mess because they want it this way. Jeremy Hunt openly wrote a paper about this before he was health secretary.

This is capable of being sorted out if the incentives are reordered. Bring on the Labour landslide. Things were much much better jn the NHS under the last Labour administration.

Doctors should be free to work in the private sector if they choose to. Fine if some don't want to because of ideology but many do. The government can incentivise medics to do more NHS work - pay them equivalent for one and yes better working conditions (e.g. increased study budgets, ring fenced SPA time that doesn't get encroached on, restore Local CEAs, and pay decent WLI rates that are competitive with the private sector ). But any suggestion of penalising/punitive measures to work in the NHS will not be tolerated. It is already a pretty huge monopoly which never bodes well for improving worker rights and many medics value the autonomy they have in the private sector.

And you are right - now aware of medics going full time private from CCT. Never used to be the case

I also don't agree with any punitive measures which I think will backfire

(I only silently judge my colleagues who leave to go private. I fully respect it's their choice it's just not one I would make.) People have different pressures some people genuinely can't afford to pass up the higher private sector wages

As opposed to the US model which I most voters disapprove of, access to healthcare in the UK is based on need rather than ability to pay.

The reality is that there are long waiting lists in the NHS and I think most people would agree that it is fundamentally unfair that someone with a less urgent medical condition can jump ahead in the queue of someone with a more serious condition or a condition that is causing more pain during the wait, simply because they are well off and can afford private healthcare.

In 2023 there was £46 billion spent on private healthcare in the UK. Introducing 20% VAT on this would raise £9.3 billion which would make a real difference to the NHS benefiting the many and not just the few.

How about instead of charging VAT on medical insurance we have a specific state run health insurance per month, and those with no income have a standard healthcare service.

This works excellently in many European countries and Australia. No need to compare to the US system.

State education isn't bad, it's just been underfunded and kids aren't being parented at home. Our experience has been state school is better than private tbh. I wish everyone had access to the excellent state school we do though, I know that's not the case though. But people assume expensive= bette,r when that's not the case at all. I think the general public would be quite shocked and how crap a lot of private schools are!

Oh and I think starmer hasn't thought of it because it's not something as attention grabbing as private school! A lot more people have private healthcare than kids at private school.

@1dayatatime you'd need to take into account that increasing the price by adding VAT would reduce the demand (and therefore the tax revenue) and the degree to which the businesses concerned could offset output VAT (VAT charged on services) against input VAT (VAT the service providers pay). As I don't imagine most consultants are registered for VAT there might be some unexpected consequences. Maybe an increase in private medical services being offered to UK citizens as part of a holiday package (when I priced up some possible orthopaedic surgery Lithuania was looking attractive).

There are also admin and enforcement costs of adding or extending any tax.

Long story short - it wouldn't raise 20%. And neither will the VAT on private school fees.

This is the model proposed by Reform which was criticised as "dismantling the NHS".

It would also lead to accusations of a two tier service.

There is already a tiered service though as much of what people experience on the NHS will depend on their postcode.
I am not sure why it's always the American system that's brought up anyway, it's famously bad despite it costing the most in the world. Their mortality rate is higher than UK.
Almost all EU countries have some form of pay in service available.

It would also lead to accusations of a two tier service.

How far do you think this should be allowed to dictate things though? No one is allowed to by a better service? Education? House? Food? Clothes?

I think they need to get more people back into work. This isn’t a benefits bashing post but it’s true 🤷‍♀️ My step-daughter is 20 and has done 3 days work in her life. She’s got nothing wrong with her physically, she just doesn’t want to work and has admitted it. She’s perfectly happy to take the handouts though 🙄 And there’s millions more just like her.