
The NHS is able to recover VAT on some non-business supplies (catering, laundry, staff training, vehicle and maintenance costs) which hospices cannot. This means that when an NHS hospice is transferred to a charitable provider a ‘VAT gap’ is left; this gap must be filled by either charitable funds or funds from the PCT.
One of Sue Ryder’s hospices incurs £44,000 of VAT per year on non-business supplies. If this service was managed by the NHS it would be able to recover 57% of the figure, enabling the hospice to provide 1500 more bereavement sessions for families or 2500 additional hours of carer support.
Hospices provide a vital service in supporting people affected by terminal illness and their families. Not being able to recover VAT is a significant burden which acts as a barrier to the expansion and development of this service provision.
Local people give generously to support the wonderful work hospices do in their communities. When they donate these funds, they expect them to go to frontline care delivery and not to meet additional VAT costs.
By not enabling hospices to recover VAT on certain non-business supplies, the Government is denying vital extra resources to those in need. I am therefore calling on the Government to level the playing field by affording hospices the same recovery rights as the NHS.