13 out of 20

That is the number of the big out sourcing companies that have subsidiaries in countries that are widely considered to be tax havens.

The Ethical Consumer website which surveyed these companies states in a report in relation to these subsidiaries

This implies that the companies concerned, including some of biggest names in the outsourcing industry such as BUPA, Capita and Sodexo, are managing their finances in such a way that they may be actively avoiding paying tax here in the UK.

The table showing where the subsidiaries are located can be found towards the end of the Ethical Consumer report.

The report goes on to say:

Ironically, this June, Capita was awarded a £100 million contract by the Driver and Vehicle Licensing Agency to crackdown on vehicle tax and insurance evasion.

It would be ironic indeed if Capita structured its tax arrangements in such a way that it paid little or no tax on this £100 million contract, and all the other contracts it has from the public sector.

Whilst Ethical Consumer speculates that Capita and others use their subsidiaries to minimise paying tax on civil service and other public sector contracts (why does Capita need associated firms in Jersey and Guernsey, when all of its business is on the mainland, if it is not for tax purposes?) the Public Accounts Committee (PAC – this is a committee of MPs who have oversight of government spending) is clear that many companies are using overseas tax havens to reduce tax on PFI projects.

In a Guardian article Margaret Hodge, the Labour MP who chairs the committee, is quoted as saying “They’re milking the PFI system for profit”.

The Guardian go on to say:

Stella Creasy, a Labour MP on the committee who has tabled a series of parliamentary questions about the taxation of PFI firms, said: “There is tax out there that the British taxpayer is owed and the Treasury is doing nothing to get it back.” She warned that the Treasury was still banking on receiving tax revenues from the 61  projects in the pipeline.

In the appendix to the report, the PAC identifies 91 PFI projects held in overseas tax havens, including 33 owned by HSBC Infrastructure, an offshoot of the high- street bank, based inGuernsey.

It should be mandatory that companies that do work for the public sector actually pay full tax in theUKand that they are barred from using tax havens, overseas subsidiaries or any other measure to avoid doing so.

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