§ Mr. Dobsonasked the Secretary of State for Social Services what is the estimated loss of revenue from the freeing of hospital contractors from value added tax.
§ Mr. Kenneth ClarkeNo special VAT arrangements apply to hospital contractors. Health authorities, in common with Government Departments, are able to reclaim VAT paid on certain contracted-out services. There was no loss to the Exchequer on existing contracts when the arrangement was introduced. Health authorities' cash allocations were adjusted accordingly. The effect in relation to new contracts is not determinable.