Overview

This bill aims to allow charitable healthcare providers taking on NHS responsibilities to reclaim Value Added Tax (VAT) on supplies they wouldn't normally be able to reclaim. This is intended to ensure they are not financially disadvantaged compared to the NHS when providing the same services.

Description

The Charitable Healthcare Providers (Value Added Tax Relief) Bill amends the Value Added Tax Act 1994. Specifically, it allows charities taking on healthcare or welfare service provision (or related goods supply) under contract with the NHS (or government department) since October 1st 2011 to reclaim VAT on these non-business supplies. This mirrors the VAT treatment afforded to the NHS itself for the same services. The amendment also extends VAT relief to wholly owned subsidiaries of charities which meet specific profit transfer conditions.

Government Spending

The bill is expected to reduce government spending. By allowing charities to reclaim VAT, the government will be refunding VAT that would otherwise be absorbed by the charitable healthcare providers. Precise figures on the expected reduction are not provided in the bill text.

Groups Affected

The bill primarily affects:

• Charitable healthcare providers: They will benefit from VAT relief, potentially improving their financial sustainability and ability to deliver services.
• Wholly owned subsidiaries of charities: Those meeting the specified profit transfer conditions will also be eligible for the VAT relief.
• The UK Government/Treasury: They will experience reduced expenditure due to VAT refunds.

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