Scotland Against PPP

Overview —

A Briefing Paper on the use of tax havens by Hub and PPP project companies


Dexter Whitfield

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This joint paper with Jubilee Scotland draws on recent and new research on tax haven involvement in the Hub companies and PPP project companies. It is based on extensive Companies House searches of annual reports and filings of the Hub and NPD companies, investments funds and pension fund investments in private investments funds.

The corporate sector continues to use tax havens despite continued criticism of their role because they maximize profits by minimizing taxation and provide a high level of secrecy of financial and business matters. The UK rate of Corporation tax was 19% in 2020 but the 2021 Budget increased the top tax rate to 25% for companies generating taxable profits of more than £250,000 from 2023. A tax rate of 19% will apply to companies generating taxable profits of less than £50,000 from 2023.

This paper has been published simultaneously with Jubilee Scotland’s paper Financing Public Scotland – a proposal for an alternative to PPP schemes.

Key Points

― Tax havens are central to the operations of many private companies involved in Scottish public infrastructure. 59.6% of companies involved with Hub and PFI schemes in Scotland had shareholders linked to tax haven activities.

― Three of the five Hub projects studied had 60% of their equity ultimately located in a tax haven.

― Four of the ten NPD projects studied had owners located in tax havens, with an average equity share of 49.3%.

― A substantial amount of Scottish public sector pension funds have been identified as invested within tax haven companies involved in Scottish PPP schemes.

― We recommend that the new Scottish National Infrastructure Company should work with the Scottish National Investment Bank to eliminate the need for and use of PPPs in Scotland.

― Pension schemes should be divested from tax haven companies and training offered to pension fund trustees to enable better and more direct investment in Scottish public infrastructure.

― Community organisations should be enabled to make investments in schemes and maximise community benefit from infrastructure investments in their area.

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