Hospitals in court for £1.5bn rate rebate claim

NHS trusts are arguing their work should qualify them as charities

NHS trusts should be treated as charities and get a £1.5bn business rate refund, a court has heard.

Derby Teaching Hospitals NHS Foundation Trust is leading 16 other trusts against 45 local authorities, including Derby City Council.

The High Court heard trusts should qualify as they worked with hospitals "plainly for the public benefit".

But barristers for the authorities said no such claims had been made before and any refund would hit public finances.

The action is being led by Derby's NHS trust against the local city council

Charities can apply for a 80% business rate rebate if a property is used for charitable purposes.

While the NHS has to pay business rates on its properties, private hospitals registered as charities can apply for the rebate.

The trusts' barrister, Christopher Tidmarsh QC, told the court the claim covered April 2012 to January 2018.

Mr Tidmarsh said the trusts' main purpose was to provide "goods and services for the purpose of the NHS", and also to provide "services to individuals for or in connection with the prevention, diagnosis or treatment of illness and the promotion and protection of public health".

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This means, he claimed, trusts are charities under the law as their purposes are "plainly for the public benefit".

'No previous claim'

In written submissions, the local authorities' barrister, Amanda Tipples QC, said successful claims would cost them an estimated £1.5 bn.

She said: "In the 70-year history of the NHS, and the 15-year history of NHS foundation trusts, no claim to be charitable (and, it would appear, no application to register as such) has been made before.

"The public finances have been arranged on the understanding that they are not."

Ms Tipples said the trusts had a "governmental purpose and not a charitable purpose".

She said the Charity Commission had submitted evidence that it "has not treated NHS foundation trusts as charities".

Mr Justice Morgan will hear the case over three days and is expected to reserve his judgment.