Sue Ryder wins first amendment to healthcare bill

15 November 2011

Sue Ryder has enjoyed a victory in its campaign to change Government policy on VAT relief for charities providing hospice care.

Yesterday, peers voted by 195 to 183 in favour of a proposed amendment to the Health and Social Care Bill. This is the first defeat the Government has suffered during the report stage in the Lords. The amendment, proposed by Labour’s Lord Patel of Bradford, requires the Government to lay a report before parliament, within one year of the Bill passing, on the VAT treatment of supplies by charities providing healthcare services on behalf of the NHS.

Sue Ryder has been campaigning to urge the Government to cut red tape on VAT for charities and the care they provide since January 2011, when VAT was increased to 20%. As part of the Government’s health and public service reforms, more NHS services will transfer to the charity sector, so Sue Ryder is encouraging the Government to put charitable healthcare providers onto an equal footing with the NHS in relation to VAT recovery. Currently, when a hospice provider such as Sue Ryder takes over an NHS service, it will end up with a bigger tax bill as, unlike the NHS, it is unable to claim tax on certain items. In order to meet these added costs, the charity has to use funds raised locally, which should be going on front-line care.

Paul Woodward, CEO of Sue Ryder, said: “We’re delighted that this amendment has been passed in the Lords – it marks a significant milestone in our campaign and is a victory for all charitable healthcare providers. We whole-heartedly support the idea of charities delivering more high quality, innovative and cost-effective public services but this is only possible if we are afforded the same VAT benefits that the NHS and local authorities are given.

“Irrecoverable VAT is a significant burden on all our care services. One of our hospices incurs £44,000 in VAT each year. If this hospice was run by the NHS, it would be able to recover 57% of this. These funds would allow the hospice to employ a nurse for around 44 weeks, provide 1,500 bereavement sessions for families who have lost a loved one or provide 2,500 hours of support from a carer. The benefit of Sue Ryder’s services to individuals, families and communities is not quantifiable. It’s priceless.”

Lord Patel, who tabled the amendment, added: “I tabled this amendment after Sue Ryder brought this inequality in tax treatment to my attention. We should not expect the charitable sector, and those individuals who give their hard-earned money to support it, to subsidise care that everyone agrees is vital. We not only ask the sector to continue to provide these services by injecting charitable funds but we add insult to injury by saying that it should do so without the tax benefits given to the NHS. I think we can all agree that funds raised by charities should go to where they are most needed – front line care delivery. I am delighted that the amendment was passed, and with the significant support it received across the Lords. ”

Sue Ryder will now focus on working and negotiating with the Government to ensure it accepts the amendment, in order to move one step closer to finding a solution that will relieve the unfair tax burden on charitable hospice providers.

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For more information please contact Nina Kapur, Head of PR at Sue Ryder on 020 7554 5943 or 07789 558 549, or email nina.kapur@suerydercare.org.

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