Health service in Lothian faces extra £5m on tax bill

THE health service in Lothian is facing an extra tax bill of more than £5 million because of next week's VAT rise and the increase in national insurance due later in the year.

The Scottish National Party today launched an attack on the UK coalition government over the additional burden from tax increases which were previously opposed by the Conservatives and Liberal Democrats.

The SNP said Scotland's NHS was being forced to pay 43m to the Treasury as a result of the VAT increase from 17.5 per cent to 20 per cent, which comes in on January 4, and the one per cent National Insurance increase, originally announced by Labour, which is due to come into effect from April.

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The party labelled it a "double tax bombshell for the Scottish NHS - a grotesque Christmas present where the Scottish NHS has to pay the UK government back for the misleading pledges of the Westminster parties".

It pointed out that while all public services in Scotland will endure the burden of higher VAT, the large number of employees in the NHS leaves it particularly exposed to the national insurance increase.

Across Scotland, the NHS will face a 26.5m bill from higher VAT.

And on top of that it will have to pay 17m in extra national insurance to the Treasury this coming year. A breakdown of the figures shows NHS Lothian with a 2.3m bill for increased VAT and between 2.6m and 3m for the national insurance rise.

Lothians SNP MSP and former Wester Hailes GP Ian McKee said: "I'm sure people across Edinburgh and the Lothians will be astounded at these figures and even angrier when they realise that they were explicitly opposed by the parties in question. It's yet another example of why neither the Tories and Lib Dems can be trusted and why Scotland requires full responsibility for our finances."

The one per cent national insurance rise was first announced by Labour in the 2009 pre-Budget report.

During the general election campaign earlier this year, the Tories said they would scrap the increase, but in his budget in June Chancellor George Osborne instead announced only a raising of the threshold which he said would lessen the impact.

The Liberal Democrats had an election campaign poster claiming the Conservatives would increase VAT after the election, but the Tories said they had no plans to do so.

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Mr Osborne announced the 2.5 per cent increase in his June budget.