Chancellor Rachel Reeves is facing renewed pressure to impose VAT on private healthcare, with former Labour leader Lord Neil Kinnock calling for the move as a means of raising billions in extra funding for the NHS.
With Labour’s autumn Budget on the horizon and mounting fiscal pressures following recent U-turns on welfare reform and winter fuel payments, Kinnock has urged the government to remove the VAT exemption currently enjoyed by private healthcare providers.
“Introducing VAT on private health provision could provide vital funding for the NHS and social care,” Kinnock said. “Ending the VAT exemption to generate much-needed revenue is a reasonable and widely-supported step.”
Analysis by the Good Growth Foundation, a think tank with close ties to Labour, suggests that charging the standard 20% VAT on private acute healthcare—excluding services provided to the NHS—could raise over £2 billion annually.
Polling conducted by the foundation in June found that 55% of UK adults supported a windfall tax on private healthcare firms, with strong backing for more progressive taxation to fund NHS services.
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