Ritchie announces: tax kills people

Nice to see him admit it:

Unlike most businesses hospitals pay VAT, and quite a lot of it, because what they supply is VAT exempt but what they buy still has in many cases (including on agency staff) VAT charged on it.

So what has happened is that the VAT paid by hospitals has increased and as a result frontline healthcare in the UK is going to be cut, significantly, to the point of reducing hospitals to a state that experts predict will be chaotic .

Blame the Tories when people die as a result, as they will. There’s no one else at fault.

See? Tax kills.

6 comments on “Ritchie announces: tax kills people

  1. Strange that it only started killing when it increased above Labour’s 17.5% threshold.

    Oh, and isn’t VAT something to do with the EU? Surely he isn’t criticising the Great Project here as well?

  2. “.. to the point of reducing hospitals to a state that experts predict will be chaotic .”

    Hospitals already are chaotic.

    Dickie also says “because what they supply is VAT exempt”.

    If a hospital is spending so much on VATable supplies that it is impinging on patient care it surely ought to be VAT registered and claiming it all back.

  3. @Gareth: there’s a difference between zero rated and exempt. Zero rated means you claim back input VAT, and charge VAT (but at 0%), as in the farming business, exempt means you can neither claim nor charge VAT. So if health is exempt they cannot reclaim any VAT paid, or charge it, if it were a private hospital, for example.

  4. Not only is VAT a creation of the EU, so is the exemption that prevents hospitals recovering VAT on their expenses.

    So who is most to blame – the Tories who increased VAT from 17.5% to 20%, or the EU who imposed the system?

    The minimum general VAT rate imposed by the EU is 15%, so 75% (15/20) of the blame must fall on the EU, and only 25% to UK governments who set a higher than minimum rate.

    Of that 25% blame to UK governments, half falls on Darling (who last raised the VAT rate from 15% to 17.5%) and the other half on the Tories who raised it further to 20%.

    So of Murphy’s claim that “There’s no one else at fault”, the Tories are only responsible for an eight of it.

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