People who have private healthcare in England warned over 'new VAT rules'

Labour will make private healthcare its next VAT target if party wins power, according to reports. It is claimed the move could raise anything between £550 million and £1.5 billion a year to fund a black hole in the nation's finances and help rebuild the NHS.

The country heads to the polls and votes between the Labour Party and Conservative Party today (Thursday July 4). Former Tory Prime Minister Boris Johnson claimed a Labour agenda would involve a series of tax hikes “racking up taxes on pensions, on property, persecuting private enterprise, attacking private education and private healthcare”.

Labour Shadow Health Secretary, Wes Streeting, has previously said there are “no plans” to introduce VAT on private healthcare. Brian Walters, of insurance broker Regency Health, said: “Jeremy Corbyn proposed to increase this (IPT) tax from 12 percent to 20 percent in the run up to the 2017 general election and, although this hasn’t been reprised by Keir Starmer, there is a worrying parallel with Labour’s private-school policy.”

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Scott Harwood, of accountancy firm RSM, told the Telegraph: “Given the similarity in demographics, the Labour Party might look at private healthcare in the same way they view private schools.” Mike Warburton, former tax director at Grant Thorntons, said VAT on private healthcare or a rise in IPT were both “entirely possible”.

William Laing, of healthcare data provider LaingBuisson, said: “Only 7 percent of people are privately educated. But for private healthcare, it’s around 20 percentc. So they would alienate a lot of people if they did.” As long as the treatment is performed by a registered health professional then the provision of treatment would be exempt from VAT.

That is as long as the services are within the profession in which you're registered to practice and the primary purpose of the services is the protection, maintenance or restoration of the health of the person concerned.