HEALTH services in Hampshire could face cuts after cash-strapped hospital bosses were hit with a massive increase in business rates.

The annual amount paid by Southampton General Hospital is set to rise from £1.92 million to £2.53 million - leaving it with £600,000 a year less to spend on patients.

The tax hike means the General will have to pay rates totalling almost £13 million over the next five years.

Other hospitals are also being charged more in a move that threatens to place extra strain on the NHS, which is already under severe financial pressure.

Antelope House, part of the Royal South Hants Hospital in Southampton, must pay an extra £47,000 - a 100-per-cent increase.

It follows the latest revaluation of property values across the UK.

This is supposed to take place every five years but the previous revaluation was delayed by the government for two years, making the proposed increase even bigger.

According to data compiled by business rate specialists CVS, hospitals in Southampton, Winchester and the New Forest will see their annual business rates rise by a total of more than £1.5 million.

Southampton’s General Hospital is said to be among the among the top 30 losers.

Its property valuation - the figure used to calculate business rate bills - is going up from £3.87 million to £5.10 million - an increase of 32-per-cent.

The resulting tax hike of £614,370 a year is enough to pay for 26 junior doctors on a starting salary of £26,350.

It comes as the NHS struggles to cope with the biggest financial squeeze in the 70-year history.

The Royal College of Physicians (RCP) and a host of senior doctors have warned the government that hospitals are "paralysed by spiralling demand" and the NHS "will fail" without an emergency cash injection.

Last night the TaxPayers' Alliance called for taxes to be cut in a bid to help the public sector.

But the government defended the huge hike in business rates - due to come into force in April.

A Department for Communities and Local Government spokesman said: “This revaluation improves the fairness of rate bills by making sure they more closely reflect the property market.

"Rateable values are set independently by the Valuation Office Agency, which uses a widely accepted method to assess NHS hospitals.

"We’ve also given local authorities the powers to grant additional business rate relief as they see they fit.

“Overall nearly three quarters of properties in England will see no change or even a fall."

But private healthcare providers such as Nuffield Health enjoy an 80-per-cent business rates discount because they are registered as charities.

Last year more than 100 NHS trusts wrote to local authorities claiming they should be eligible for the discount and a £1.5bn rebate.

Their request was rejected, but they are now understood to be considering legal action in what could become a major test case.

The Local Government Association said: “NHS trusts and foundation trusts are not charities and therefore not eligible for mandatory non-domestic rate relief."