Streeting rules out VAT on private healthcare
At the forthcoming Budget, Wes Streeting has ruled out introducing value added tax (VAT) on priVATe healthcare. It comes after newspaper reports that the Treasury was considering including private healthcare services within the scope of the sales tax. However, when asked if this was under consideration, the health minister told BBC Breakfast, "it is not happening. It comes as Chancellor Rachel Reeves is repeatedly asked about the likelihood of tax hikes, including VAT, as she introduces her budget in November.
According to economists, taxes will have to rise in the fall Budget if the chancellor is to obey her own-imposed limits on borrowing to finance public services. Reeves said in a Labour conference address on Monday that the government was facing difficult choices and that she did not take risks with the public budget. The chancellor has pledged to keep
hardertaxes, inflation, and interest rates as low as possible. However, hinting at further tax hikes, she said the government's choices had been made
by international events and thelong-term harm to the economy. Labour promised not to increase VAT, along with National Insurance, or the basic, higher, or additional rates of income tax in its election manifesto. According to newspaper reports, Treasury officials are considering expanding the scope of VAT to help raise more funds. If they are classified as reduced or zero-rated, VAT is levied at a standard rate of 20% on most products and services in the United Kingdom. Except for some procedures that are primarily cosmetic, the majority of priVATe healthcare services are now exempt from VAT. PriVATe school tuition were also exempted, but the government introduced VAT on school charges in January, estimating it could rise £11 million. 7bn a year by 2029/30.
Reeves was asked if VAT would rise in a pre-conference address, and she replied, The manifesto promises stand.
Senior minister Sir Keir Starmer, among other senior ministers at Labour's conference, have echoed
the world has changedthose words. When asked whether she would have to pay taxes, Reeves said
We're not immune to any of these things,in the last year, referring to conflicts in Europe and the Middle East, US tariffs, and the global cost of borrowing.
criticalshe said. Reeves has been asked by Labour leader Neil Kinnock to place VAT on priVATe healthcare in order to raise money for the NHS. The Labour peertold the I newspaper that the VAT exemption on priVATe healthcare would provide
for public services and bewidely supported
a lot of them are talking rubbish.by the public. The Good Growth Foundation think tank, which claims that enforcing VAT on priVATe acute healthcare will raise more than $2 billion. Long-term government debt and weak economic growth have fuelled rumors that the chancellor will have to raise taxes. The National Institute of Economic and Social Research, an independent think tank, predicted that the chancellor would have to plug a £50 billion deficit in the public budget last month. However, the chancellor played down the figure and chastised such forecasters, saying,
