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Press watch: PFI and tax havens

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‘More than 90 private finance initiative projects have been moved into offshore tax havens, according to a report by the European Services Strategy Unit, a think-tank highly critical of the PFI … The equity in projects originally owned by HSBC Infrastructure, John Laing Infrastructure, 3i and others, including hospitals, schools, courts and police stations, is held in Guernsey and Jersey, the unit said.

‘The switch of equity ownership to tax havens – and its effect on whether PFI projects are good value for money – was raised with Treasury officials by MPs on [the Commons public accounts committee] … Stella Creasy, a Labour member of the committee, asked Treasury officials if they were concerned that 33 projects originally owned by HSBC Infrastructure but sold last December to HICL Infrastructure had generated £38m profit last year but paid only £100,000 in UK tax.

‘The Treasury, she said, took into account the tax it was likely to get back from a PFI deal compared with more conventional procurement to decide whether the PFI route was value for money. But if ownership of the schemes was moved offshore, the Treasury tax take was likely to be lower, she said.’

Financial Times, 21 June 2011