Tax avoidance and the NHS – my report for Unite

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My report for Unite the Union on tax avoidance in privatised suppliers to the NHS is now available here. As I say in the forward:

If a willingness to pay the right amount of tax, at the right rate, at the right time and in the right place is the best indication that there is of corporate social responsibility then there is, unfortunately, little evidence from the ten companies surveyed to produce this report that many of the suppliers of private services to the NHS are committed to this ideal.

Admittedly, this conclusion is not helped by the fact that eight of these ten companies are at present making losses, and so pay little or no tax at present, and may not do so for some time to come. 

Notably, two companies that did appear to pay tax for three years (Spire and General Hospital Group) also appear to have reclaimed it in 2013 whilst one company that appears to pay tax — Bio Products Laboratory Holdings Limited — pays almost all its tax in the USA leaving only insignificant amounts due in its UK subsidiary.

Just two of the companies surveyed, HCA and Ramsay, pay any significant UK tax and that is because both are profitable in the UK.

The remaining companies surveyed all appear unlikely to pay any significant tax in the UK in the foreseeable future.

That fact has not, however, prevented all of the companies surveyed, or their associated groups, having offshore connections of varying degrees of significance. 

Some, such as Virgin, Spire, and General Health Group, are all owned from tax havens. 

Others, such as Care UK, use tax havens for funding purposes. 

Some, like General Health Group, Care UK, and maybe Ramsay, use offshore structures to own property assets in the UK.

The combination of a current lack of tax payments from many of these companies, coupled with their apparently deliberate use of offshore structures that can only be intended to save tax at some time in the future, suggests a very low commitment on the part of these companies to pay tax in the UK even though tax paid on corporate profits is currently enough to fund about 30% of the National Health Service. 

This conclusion is disappointing. The UK government, and the government of Scotland, have both committed in recent regulation legislation to make compliance with tax regulation a condition of successfully tendering for government funded contracts. But as yet it seems that no company has been excluded from any contract for this reason.

This is deeply disappointing and reveals a commitment to tackling tax avoidance that is little more than lip service on the part of this government. This has to change.