Jimmy ThomasA widower who donated £2.3 million to a specialist NHS cancer hospital has been landed with a £460,000 VAT bill.

Entrepreneur Jimmy Thomas has called for a change in the law to ensure hospitals are exempt from the tax after he funded the refurbishment of the Ellis Ward at the Royal Marsden cancer centre in Chelsea, west London.

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The wealthy 78-year-old donated the cash in tribute to his wife Alma, who was treated at the hospital before she lost her fight with ovarian cancer in 2008. The Ellis Ward - which provides treatment for female patients - reopens on Friday following the completion of a one-year rebuilding project.

Mr Thomas, who made millions of pounds through a bingo hall empire across the East Midlands, described the VAT costs as "criminal" and said he had raised his concerns with the Prime Minister.

Mr Thomas, a Conservative Party donor, said: "The fact that a world-leading hospital, at the very pinnacle of treatment excellence, should be slammed with a VAT bill just to improve facilities for essential NHS care is criminal. The law must be changed.

"The ward - which had 18 NHS beds and two private rooms - needed so much work to provide the comfort and dignity the patients so badly required, the refurbishment work was classed as a rebuild. And under the law, a rebuild is subject to VAT at 20%. I have sat next to David Cameron at lunch and explained this atrocious state of affairs. So far, there has been no response and frankly I am tired of waiting."

Mrs Thomas died on New Year's Eve in 2008, aged 74. Mr Thomas, the co-founder of the Hippodrome Casino in Leicester Square, London, praised the care given to his wife by Royal Marsden staff but said the hospital was in need of investment. Mr Thomas has now set up a trust to continue fundraising.

Medical director Professor Martin Gore said: "We are grateful to the generosity of Mr Jimmy Thomas and his family, who, by funding the refurbishment of this ward have realised his wife's vision of creating a state-of-the-art unit with a warm and welcoming environment which ensures the highest levels of comfort for NHS patients."

A Revenue and Customs spokesman said: "Both building and refurbishment works are subject to VAT. This is the case for hospitals as with other types of building. VAT will be payable on such works, whether they are funded by Government or through donation. The tax system provides a range of very generous tax reliefs to support charitable giving. Gift Aid alone adds around £1 billion annually to charity coffers."

Mr Thomas said he hopes to raise the £460,000 needed to meet the cost of the VAT bill through the fundraising trust he has set up for the Royal Marsden.

10 of the biggest consumer rip-offs

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    10. Premium rate phone lines


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