In July 2013 it became apparent that there was a problem with the transfer of NHS property (transferred from parts of the organisation that “disappeared” under the Health and Social Care Act 2012) to a company called – unsurprisingly – NHS Property Services. It is in fact a state-owned company. This company is supposed to collect rents from the various users, but because of the way it has been set up it will have to charge VAT on the rents.
So the NHS, which is state funded, pays an extra 20% back to the government! Those who have to pay will have to trim expenditure elsewhere (ie make cuts).
I suppose you could adjust all the rents downwards so that the overall bill remains the same. But wouldn’t it be easier not to pay the tax? After all it requires an army to collect it.
I expect the government will simply increase allocation to compensate. Then of course it will say that it is pouring even more money into the NHS, but will forget to add that it is all pouring straight back out without any benefit to patients whatever.