Question to the Department of Health and Social Care:

To ask the Secretary of State for Health and Social Care, whether he plans to make an assessment of the potential merits of NHS Trusts setting up wholly owned subsidiary companies to avoid paying VAT.

The current NHS England guidance dated February 2024, titled Guidance for assuring and supporting complex change – subsidiaries guidance for trusts forming or changing a subsidiary, confirms that the Department “reminded all NHS provider finance directors in September 2017 of their responsibilities around tax, advising that tax avoidance arrangements should not be entered into under any circumstances. We expect all NHS providers to follow this guidance when considering any new arrangements or different ways of working”

A perceived VAT advantage of setting up a wholly owned subsidiary cannot be the only reason for its creation. Subsidiary proposals should be driven by a robust commercial strategy that delivers clear financial, operational, and patient benefits.

No assessment is planned or deemed necessary.