03292017Wed
Last updateFri, 24 Mar 2017 12pm

 

Private firms bidding for NHS services accused of using "tax havens"

A number of private health firms bidding for NHS services have tax avoidance measures “at the very core of their business planning”.

Virgin Care, a subsidiary of Richard Branson's Virgin Group Holdings Ltd, is claimed to have 13 holding companies between itself and its parent company based in the British Virgin Islands - a known tax haven - said trade union Unite.

The British Virgin Islands was ranked in the top 20 countries in the world by the Tax Justice Network in 2013 for financial secrecy and an ability to avoid taxes.

A spokesman for Virgin Care said: "As the report points out, we have not yet reached a state of profitability. The shareholders are still investing in the growth of the business. We are incorporated and resident in the UK for tax purposes and subject to UK tax law, and will meet those obligations as and when we reach profitability."

Virgin Care provides 30 primary care services across England including GP practices, GP out-of-hours services and walk-in centres. It is currently bidding for a £280m contract to treat patients with long-term conditions such as diabetes and heart disease. 

Care UK and The Practice PLC are also accused of using tax havens for funding purposes.

Richard Murphy, a chartered accountant for Tax Research Limited, said tax avoidance for businesses such as Virgin, Care UK and The Practice, is at “the very core” of their activities.

“This is the wrong priority for companies working in the state funded NHS where the tax contribution everyone makes, including from those who supply NHS services, is vital to the continuing health of the nation,” he said.

Unite general secretary, Len McCluskey said: “It’s a national scandal that firms can bid for cancer treatment contracts while scheming how to siphon their profits out of the country into far flung tax havens.

“Despite the NHS being under huge financial strain the Coalition government is behaving like an accomplice to private companies with  tax avoidance structures in place.”

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