News / Foundations tax plans stay on course

Plans remain in place to levy corporation tax on foundation trusts’ commercial activities from next April, government officials have confirmed.

‘The aim is to legislate for this in the finance bill in 2010, so corporation tax would apply from April 2010,’ Simon Moulden, policy adviser at HM Revenue and Customs told Healthcare Finance.

A consultation paper and draft legislation will be published in the autumn. Mr Moulden said the core of the policy was broadly agreed but that work was ongoing about ‘the finer detail’. He encouraged NHS finance managers to engage with officials and provide information about the practical implications or issues relating to specific income streams.

Although no official papers describing the planned approach have been released, HMRC and the Treasury have informally consulted with the HFMA FT Finance Technical Issues Group over the past year. Having dropped original proposals to tax any profits relating to income that could be sourced to the private sector, a more focused approach is being taken.

Taxable activities would essentially include private healthcare, pharmaceutical production and rental income. There is still a question mark over the inclusion of car parking income. Any work between NHS bodies would be excluded, as would FTs’ interest on bank deposits. Issues still being considered include the treatment of income from the wider public sector, including local authorities or the Ministry of Defence.

Mr Moulden will lead a workshop on the plans to levy corporation tax at the HFMA annual FT conference in Blackpool at the beginning of July.