NHS trusts ask to be treated as charities to bag £1.5bn in backdated rates relief

More than 80 have written to local authorities seeking this change so they can qualify for mandatory business rate relief

NHS trusts: seeking backdated payments
NHS trusts: seeking backdated payments

More than 80 NHS trusts have written to local authorities asking to be treated as charities so they can qualify for mandatory business rate relief that could net them backdated payments worth £1.5bn.

If the requests are granted, the trusts would become entitled to the 80 per cent discount on business rates that charities receive under existing legislation.

A Local Government Association spokesman confirmed that the value of such a reduction for NHS trusts would be £250m a year.

The NHS trusts have asked for the relief be backdated for six years. If this part of each claim is successful, they would be in line to receive a total of £1.5bn – the same as the annual value of mandatory business rate relief received by the voluntary sector.

The costs of paying the trusts if their claims are successful would be split evenly between the Department for Communities and Local Government and local authorities.

Each local authority would have to decide individually whether it accepted a request for business rates relief.

A spokesman for the property advisers Bilfinger GVA, which is representing the NHS trusts, said: "After an NHS trust client raised a concern, we have carried out research into the application of mandatory rate relief and have sought legal opinion on the issue.

"As a result, we have made applications for relief on behalf of a number of our NHS Trust clients. It would not be appropriate for us to comment further at this stage."

A spokesman for the LGA said: "The LGA is supporting member councils that have received applications for mandatory relief from business rates on behalf of a number of NHS trusts and is working with them to consider the appropriate response. We have sought legal advice from counsel.

"We believe that NHS trusts and foundation trusts are not charities, and that the applications for rate relief are therefore unfounded."

A spokesman for the DCLG said: "It is for local authorities to decide whether any ratepayer meets the eligibility criteria that is set out in legislation."

The government will report on its review of business rates in next month’s Budget.

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