NHS trusts drop court appeal for £2.35bn business rates discount

A petition to the Court of Appeal has now been dropped and hospitals will continue to pay full normal business rates

A group of NHS trusts has abandoned a legal battle to get a £2.35bn refund on business rates paid by hospitals.

The group, led by University Hospitals of Derby and Burton NHS Foundation Trust (UHDB), argued they should be treated the same as charities.

However the High Court rejected the case in 2019 and ruled NHS trusts were not entitled to the same 80% reduction that charities get.

A petition to the Court of Appeal has now been dropped.

Private healthcare groups can receive an 80% relief discount from local authorities if they are registered as charities.

This includes Nuffield Health - the UK's second largest charity by income.

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UHDB - along with 16 other trusts - argued they should also be entitled to this discount.

A victory at the High Court could have seen them receive a rebate worth £2.35bn backdated to 1 April 2010.

Of the original NHS trusts, 11 said they would petition the Court of Appeal but the case has now been dropped.

Hospitals will continue to pay full normal business rates.

The real estate adviser Altus Group says NHS hospitals in England and Wales will pay a total of £423.02m in business rates from 1 April for the 2021-22 financial year.

A spokesperson for UHDB said: "We were among a number of NHS Trusts who decided it would be in the interest of our patients to be involved in a national review to test the possibility of NHS Foundation Trusts receiving rating relief, which is money that could've otherwise been spent improving services for our patients.

"UHDB is no longer involved in this business rates case and, following the High Court's verdict, the Trust made the decision not to appeal this ruling."

The government is currently reviewing the business rates system and the final report of the "Fundamental Review" will be published in the autumn.

When the case was rejected in 2019, the Local Government Association said it was "good news for councils", which rely on business rates as "an extremely important source of income".