VAT on private healthcare?

[justasking111]

Neil Kinnock has an idea for Rachel Reeves. Putting Vat on private healthcare would raise 2 billion pounds a year which could improve the NHS.

I have my doubts about this helping unless it's ring fenced for the NHS.

He's also said that anyone with assets of ten million pounds plus should pay 2% tax on it.

Yep same argument as with independent schools especially if you have SEND kids.

Entirely possible that he has three companies to avoid paying VAT

https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit13500

“all the posts on this thread do is show how much you haven’t got a clue how any of this stuff works.”
“the insurers could register for VAT and reclaim all of the input VAT charged by private hospitals, but would not be able to recharge to the customer because insurance does not attract VAT.”

I don’t specialise in VAT, but I don’t think it’s quite as straightforward as you believe.

“VIT13500 - VAT Input Tax basics: insurance claims
Insurers cannot recover any VAT incurred in obtaining replacement goods or having repairs carried out for a policy holder. The supply of goods (or services in the case of repairs) is considered to be made to the policy holder. This is so even when payment is made directly to the supplier by the insurer.”

In that case, medical insurers wouldn’t be able to reclaim the VAT.

This is the next obvious step following on from VAT on school fees and there's no argument against VAT on private health which isn't equally valid against VAT on private schooling. Obviously the state provision is failing too many people (true ij education too) and obviously people who aren't intrinsically wealthier than their neighbours will do anything they can to scrape together the funds they need to help their much-loved family member to access a service that works if the state offer is inadequate (true in education too). And obviously the staff working in the private sector in both health and education recieved their training and experience in the state sector and it would be better for the population in general for their time and efforts to be ringfenced for the state sector (if it weren't for those pesky human rights that mean we can't force people into an employment they don't want). And obviously both being healthy and well educated are fundamentally good things in and of themselves.

I've used private healthcare a little. When I had a cancer diagnosis there was a 5 week wait to see an oncologist and get started with chemotherapy. Because I had a spare £300 I was able to book a private consultation with the same oncologist (who divided his time between private and nhs practice) after only a week so I was able to start my chemo (on the NHS) 4 weeks earlier than I might have otherwise. I'm not ashamed of that and certainly I've raised a lot more money than that for cancer charities since then but I would have had no objection to a VAT addition meaning that the private appointment cost me £360 with the £60 tax goong towards improving things for the people who don't have as much as £36 spare and have no choice but to wait those 5 weeks. In general, if you are in a position to scrape together £300 you aren't going to give up and not bother if the price becomes £360 andif you are in a position to scrape together £3,000 or £30,000 you aren't going to give up and not bother if the price becomes £3,600 or £36,000 - an uplift of 20% keeps the affordability within the same broad level, it's not like the cost is doubling.

I would rather such a tax didn't get introduced but given that the money has to come from somewhere it is appropriate for those who are able to afford private healthcare to give a slice of what they can afford to benefit those for whom it's not something they can dream of ever affording - and if they are getting the money via crowdfunding rather than their own money, a VAT addition would effectively mean than ⅙th of each donation is going towards improving healthcare for those who don't have the contacts, skills and energy for a crowd funding campaign- also no bad thing.

I had a hysterectomy privately after two years on an NHS waiting list. It would have been another 18 months before they got around to me - Gynaecology services are particularly appalling where I live, though I gather they are bad all over the country. I was at the point of having to give up work by then because I could barely leave the bathroom, never mind the house, for several days a month and was ending up in resus passing out with severe blood loss.

Now the government wants to penalise people like me who wish to continue in their higher-rate tax-paying jobs rather than claiming benefits, and who have already contributed (sustantially for years) to a health service that they can't use. They seem determined to eliminate their voter base with their spite towards working people.

It’s exactly the same argument that was used for private schools, so I fully expect it to happen.

I suspect a lot of people will expect it not to go ahead because of arguments about how:

-people already pay NI for the NHS but had to save for private so have saved the county money
-what about people who can’t really afford it but cut back on everything else to be able to afford it for a disabled child, etc

For every argument given, there is a parallel to the VAT on PE arguments. And it was proven that the vast majority of people just don’t care. In fact a good proportion will revel in the idea that it will make some people suffer.

Hahaha did you all think the politics of envy was going to be limited to just VAT on school fees?? You all were crowing over that, but now they're coming for you too......

Also, you know how the VAT on school fees has made absolutely no difference whatsoever to state schools, and in fact was so ill thought through it's probably cost the country money? Yeah, this will be the same for the NHS too.

Yep. We are the flip side to countries who realise a tax rebate on both lowers the state burden.

Someone upthread mentioned how disappointing it was that Labour is continuing to find ever more inventive ways to find money down the back of the proverbial sofa rather than focusing on growth, which would make all of this navel gazing unnecessary.

Such a shame that saying growth many times per day during an election campaign doesn't magically lead to growth. Who knew.

I paid for my cataract surgery (no health insurance) and would happily have paid double. An extra 20% would have made no difference.

£18k to have DH's recent hip operation. VAT on that would have been an extra £3.5k. Putting it further out of reach for many. He had the op privately before the NHS even got round to giving him an initial appointment. He would have been waiting at least another year for the op, and he was urgent. By the time he had it done, following physio, bags of various pain drugs, which wrecked his stomach, huge swellings in his groin (which they panicked about and thought was Lymphoma), NB: wasted consultation for that, including a PET scan...... His hip was actually completely toast.

The reason he didn't get priority was that he was too young and still walking......yes, but that's because he's super fit. The private hospital had a lot of younger patients, who the NHS just won't treat.

Money well spent, and yes, we had savings, lucky us, but as retirees, no health insurance. We now ensure we have a large lump sum stashed away for the next issue.

Which is easy to say, if you have the money, but if you don't ........

Yes, my DC is having private surgery this week before she has even got an appointment to be assessed/diagnosed by NHS (waitlist is 14 months).

I am also funding the surgery from my savings, which are mostly made up of redundancy money from a job I lost after 10 years.

While there are many who can afford ongoing private insurance, many of us can’t and don’t have unlimited supplies of money to just add 20% to everything.

If I speak to any people IRL who are considering having children in the future, i’m advising all of them to having savings aside to pay for private healthcare, as the NHS lists for kids are shocking, plus a trend of GPs not taking new mums seriously.

And if they can't put another 20% on a credit card, loan then they'll be added to your lengthy queue @MidnightMeltdown they might be ahead of you in the queue. Can you really not understand this

Hosta I couldn't even get a referral for the same symptoms as your husband. After a year I got an x-ray at the local hospital. Everything fine, touch of arthritis. A year of agony and two walking sticks later I went private for a consultation and x-ray. Right hip, bone on bone, left hip severely inflamed. Radiographer was surprised I wasn't in a wheelchair.

Radiographer looked at NHS x-ray and remarked. Well they took it at the wrong angle so the issue was obscured.

In Wales they've never liked it if you have a private consultation and scans, an irrefutable report diagnosis because then they're obligated to put you on the waiting list . It's a bit of a shortcut sometimes.

If you don’t then you can’t afford it and another 20% wouldn’t change that. Nobody who can afford private healthcare is scrabbling down the back of the sofa.

I’m not sure why you’re directing this at me - two wrongs don’t make a right and I don’t believe that private education should’ve been taxed either. I’m a single mum and sent my DD to a prep school when she was young in order to avoid huge class sizes so I certainly understand the struggle around school fees.

A lot of people are taking out loans to fund medical treatment, because that’s what they need to do to stay in work. So, they will be taking on 20% more debt to pay for something that the NHS won’t provide in time for them to remain economically active.

‘Further and faster’

Didn’t work either.

Exactly. I work privately as an AHP (spent 20 years in the NHS before anyone shouts at me..) and the amount of people taking out loans, using their life savings or remortgaging their house to pay for something as simple as a hip replacement is abhorrent. It’s either that or languish in pain for years, become disabled, economically inactive and cost the government more money than they ever would have done if they received timely treatment

Loads of people pay for private health care out of their own pockets. Bastard rich people.

I’m paying for a private operation for my child. I am using my redundancy money. Many of us aren’t rich.

Agreed.

Meanwhile in Germany you have a basic level of healthcare for everyone, and then you pay top ups. My best friend goes back to Germany for all her healthcare. Go to your GP, get referred, choose a consultant or hospital, and get treated within a couple of weeks. Yes, even for hips etc

They also have a sensible outlook on education ie provide tax relief for parents who choose to send their children to independent schools.