Wednesday, December 27, 2017

PFI profits

Analysis by the Centre for Health and the Public Interest found that more than 100 PFI operators in the NHS collectively saved an estimated £84m between 2008 and 2015 and are due to gain another £106m between 2016 and 2020 because of the falling corporate tax rate.

The PFI companies are making bonus profits because the corporation tax rate has fallen from 30% when the majority of their contracts were negotiated to 19% now and is due to drop as low as 17% by 2020. Some companies may be deferring their tax liabilities to later in their contracts when the rates will be lower. Rates of corporation tax paid by a company are part of the value for money assessment undertaken by the government when looking at whether or not to use private finance or public sector funds but this has not been reassessed since 2012.

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