PFI projects moved off-shore to save tax
Billions in PFI investment moved off-shore by City owners to skirt tax
Billions invested in refurbishing the Treasury headquarters, Home Office and
other PFI projects have been moved off-shore by the City to avoid paying tax on
the profits.
According to the Guardian more than 50 PFI schemes have been placed
in portfolios held in the Channel Islands. The investments are held by three PFI
groups – HSBC Infrastructure, 3i Infrastructure and Babcock and Brown Public
Partnerships.
The tax planning works by transferring the 90% of the ownership of the
company running the PFI off-shore once the buildings have been completed. This
keeps the income from PFI free from tax for as long as 40 years in some cases.
The revelation of the PFI tax planning will intensify criticism of the
controversial method of using the private sector to deliver large public works.
Further reading:
Treasury headed for clash over PFI
New rules will put PFI billions on Treasury balance
sheet