NHS hospitals brace themselves for business rates’ hike in April

Changes to the business rates system after from April 1 this year mean that the 1,249 NHS hospitals liable for the property tax will see their bill increase by 21% over the next five years, according to research conducted on behalf of the Guardian newspaper.

The total bill faced by hospitals will rise from £313m this year to £377m a year on average for the next five years – an annual increase of £64m that would be enough to pay for nearly 2,500 more junior doctors says the Guardian.

The hospitals facing the steepest rises include the Queen Elizabeth hospital in Birmingham with a business rates’ bill that will go from £2.8m a year to £6.9m, and the Royal London in east London increasing from £6.3m to £9m.

The big increases are a result of the postponement of the revaluation of property in Britain. This process which takes place every 5 years was controversially delayed by the government for two years, making the change in bills from April more pronounced.

Charging business rates to NHS hospitals has always been controversial with some private healthcare providers attracting an 80% discount because they are registered as charities. More than 100 NHS trusts, roughly half of the acute trusts in the country, wrote to local authorities last year claiming they should be eligible for the discount and a £1.5bn rebate. Although their request was rejected, they are now understood to be considering legal action in what could become a major test case.

A spokesman for the Department for Communities and Local Government said: “This revaluation improves the fairness of rate bills by making sure they more closely reflect the property market. Rateable values are set independently by the Valuation Office Agency, which uses a widely-accepted method to assess NHS hospitals.”

He added that nearly three quarters of properties in England will see no change or even a fall in their business rates.