Health secretary Wes Streeting has confirmed that there would be no VAT on private healthcare in the upcoming Budget, saying, “It’s not happening.”
Streeting’s clarification follows reports that the chancellor was considering VAT on private healthcare. Labour has pledged not to raise taxes though critics say removing the exemption could raise billions.
Former Labour leader Lord Kinnock recently called on Chancellor Rachel Reeves to introduce VAT on private healthcare services, suggesting the measure could raise billions to support NHS reform and funding. Kinnock argued that removing the current VAT exemption on private medical services would be a politically deliverable step at a time of mounting pressure on the NHS.
He said: “Introducing VAT on private health provision could provide vital funding for the NHS and social care. After 14 years of underinvestment, many people are turning to private healthcare not out of choice, but because they cannot afford to wait. This has increasingly led to unequal access to care. Ending the VAT exemption to generate much-needed revenue is a reasonable and widely supported step.”
Broadstone head of health and protection Brett Hill says: “It is pleasing to see the Government putting distance between tax measures that would limit access to private health treatment and heap more strain onto our over-burdened NHS.
“The private sector is playing an important role in our country’s healthcare crisis by delivering record admissions amid growing uptake of products like Private Medical Insurance and health cash plans.
“We would also like to see clarity that Insurance Premium Tax will not be hiked. If anything, this tax should be reduced for private healthcare services to increase access, to enable earlier and cheaper medical care and to protect the NHS from additional pressure.”