Introduction

While government expenditure dominates the funding of health care in the UK, with £180 billion spent by government on the National Health Service (NHS) in England alone, by far the largest portion of English social care is provided unpaid by family and friends – at an estimated value of £62– £103 billion (NAO, 2018; King's Fund, 2021a). This dramatic difference in approach is part of the contrasting stories of health and social care, related in this chapter. The chapter examines the taxation basis for the funding of the NHS and its durability over time and juxtaposes this with the persistent calls for change in the way social care – only partially funded through taxation – is financed. While these contrasts are UKwide, variation in approaches to funding across the four UK territories will be noted.

The chapter also explores growing public support for raising taxes to increase funding for the NHS, the increased use of taxation to fund private health care providers and attempts by both private providers and NHS Trusts to reduce tax liabilities through appeals to ‘charitable’ status.

Finally, the chapter considers two key ways in which taxation is implicated in the need to reduce socio-economic inequalities in order to reduce health inequalities. The first concerns the role of taxation in achieving a redistribution of resources and the second the levying of taxes on healthharming behaviours at both industry and individual levels.

There are two notes of caution to sound at the outset. The first is that much of the discussion is framed in terms of the use of taxation to fund services. However, this ‘common sense’ perspective is increasingly challenged by many adherents of modern monetary theory, who hold that government spending precedes taxation and that taxation does not fund services but fulfils other macro-economic and social functions (for example, Murphy, 2015). Second, in selecting the focal points of this chapter, we have omitted other legitimate topics, such as the tax treatment of NHS employees and general practitioners, including tax treatment surrounding medical pensions, and a wide range of the more elaborate tax planning strategies adopted by private providers of health and social care.