ICAS response to the Treasury Spending Review 2015
ICAS has responded to the call for evidence by the Treasury Spending Review in advance of the Autumn Statement on 25 November 2015. The Spending Review highlights the priorities and policies of the UK Government.
ICAS' response to the HM Treasury Spending Review
The response is limited to the policy to explore innovation and reform in public services and the tax impact of these on public sector organisations.
ICAS has been examining the impact of the current UK VAT rules for the public sector. Changes to the way in which public services are delivered together with limits on the amount of public money available have highlighted the impact of VAT on decision making across the sector.
ICAS believes that there are strong arguments to suggest that the UK VAT system is not fiscally neutral and acts as a disincentive to implement new and innovative service delivery models across the public sector.
The submission highlights particular concerns about the impact of changes to the delivery of health and social care across the UK. A revised social care framework should ensure that the benefits of the traditional system are retained while allowing new methods of service delivery.
The aim should be to have arrangements which ensure horizontal tax neutrality, so that no matter how the care is provided the VAT cost is similar.