VAT at 50

Saturday 1st April 2023 marks the fiftieth birthday of VAT (value-added tax) being introduced in the UK. Brought in to replace ‘purchase tax’, a 33.3 % tax on ‘luxury’ goods which was introduced in 1940 to discourage waste, VAT was described in the House of Commons by Conservative Chancellor Lord Barber as a “simple tax” and “the most significant change in Britain’s tax system since the war“.

In the fifty years that have followed, the amount of VAT paid on goods and services has fluctuated and VAT within the NHS continues to be of a complex nature. The disincentive to contracting out services in the NHS and Government departments was recognised in 1983 and a direct refund mechanism was introduced. Since 1988, Liaison Financial has supported NHS organisations to navigate the legislation, providing reviews and services to ensure that VAT is recovered correctly when chargeable.

Over the past decade, our VAT services have saved the NHS over £746million for reinvestment into healthcare and frontline services.

We continue to deliver VAT services to the NHS to this day as a market-leading provider, generating savings through our compliance, assurance and consultancy services to more than 260 NHS organisations throughout the UK.