Private health firms bidding for major NHS contracts have tax avoidance measures ‘at the very core of their business planning’, new research reveals.
Research by tax expert Richard Murphy reveals how private health companies, who are actively bidding for and already running sections of the NHS, are going to extreme measures to avoid paying their fair share in taxes.
Richard Murphy analysed ten private health firms and found that they all make use of tax havens, and complex corporate structures to lessen their potential tax bill.
The companies analysed by Richard Murphy’s research are: Care UK, Circle, General Healthcare Group, HCA, Bio Products Laboratory Holdings, Ramsay Healthcare, Spire Healthcare, The Practice, Optum (United Health) and Virgin Care.
He found that only two of the ten companies pay any significant tax in the UK and all of them have links to offshore tax havens, including the Channel Islands, British Virgin Islands and Luxembourg.
According to the research, Virgin Care paid no tax on its latest recorded profits and uses 13 holding companies to distance its healthcare division from its parent company.
Virgin Care currently operates 30 primary NHS care services across England including GP services, walk-in centres, urgent care centres and minor injury units.
The company have been allowed to bid for an NHS contract worth £280 in Staffordshire, despite their questionable tax arrangements.
Optimum UK is a subsidiary of the US giant United Healthcare and has paid no tax on its reported profits. The firm is linked to a tax haven in the Caymen Islands and is bidding for an NHS cancer and palliative care contract worth £1.2 billion.
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.
“To make matters even worse many of these companies are US companies, or have strong US investment links, which means that the government could be prevented from taking their NHS contracts back into the public sector unless the NHS is exempted from the trade deal TTIP.”
“Good government should do everything possible to protect taxpayer funded public services like the NHS from companies with links to tax havens. But the Tory government’s warped Health and Social Care Act has opened up the door to private companies with dubious tax arrangements.
“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.”
Spire Healthcare and General Healthcare Group have both received tax credits from the HMRC, while at the same time being registered in tax havens.
None of the companies researched by Mr Murphy have been blocked from bidding for NHS contracts.
Richard Murphy said: “What the structure of many of these businesses shows is that tax planning 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.”
Source: Unite union press release.