VAT charges 'costing NHS money'

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An MSP has accused the UK Government of diverting cash from medical services by charging hospitals VAT when they hire temporary doctors.

SNP MSP Dr Ian McKee, a former GP, said Chancellor Alistair Darling failed the NHS by not preventing Revenue and Customs enforcing the charges.

The only VAT-exempt temporary NHS employees are nurses.

A spokesman for the Treasury said NHS services were fully funded to take account of all taxes incurred.

Hospitals currently have to pay the tax on all other health professionals they hire, including locum doctors.

Dr McKee has written to the chancellor demanding that exemptions previously used by health boards to recover the charges are reintroduced.

'Ploughed back'

He said: "It is ridiculous that when hiring in much needed nurses to provide temporary cover the NHS is able to reclaim VAT but when hiring in doctors or other health professionals for the same purpose the NHS now faces VAT charges.

"This is vital money that should be used for front-line services in the NHS, not ploughed back into Treasury coffers.

"I have written to Alistair Darling asking him to end this ridiculous situation, to change the advice and to ensure that money from the Scottish Government for spending in the Scottish NHS is not being confiscated by the tax man."

The Treasury spokesman added that a formal response would be issued to Dr McKee's letter in due course.