PFI shareholders are using tax havens, MPs find
A Public Accounts Committee report on the Private Finance Initiative finds high use of offshore accounts by investors
TAX REVENUE lost through the use of tax havens by Private Finance Initiative (PFI) investors means the scheme does not represent value for money, MPs have said today.
PFI schemes are public projects that are part-funded by the private sector. A report by the Commons’ Public Accounts Committee found that many shareholders of PFI investment funds are registered offshore. It quoted one fund that had 72% of its shareholders abroad.
However, the Treasury does not take this into account when reviewing the value for money of a scheme for the Exchequer, the MPs said. The government was unable to say whether PFI investors had paid tax in the UK on their profits and equity gains or whether corporation taxes had been collected from PFI companies. PFI “looks like a better deal for the private sector than for the taxpayer,” the report added.
PAC chair Margaret Hodge (pictured) said: “The Treasury assumes tax revenues when assessing the value for money of a PFI project, yet does not monitor whether taxes are paid. In our evidence, we found that tax revenue is being lost through the use of off-shore arrangements by PFI investors.
“The Treasury should measure the tax revenues from PFI deals and should ensure that this is taken into account in future assessments of PFI against conventional procurement.”