THE private company which built Queen Alexandra Hospital has sold off a huge chunk of the debt for the project, it has emerged.
And the firm which now receives the profits from taxpayers’ repayments is based in Guernsey – meaning it can potentially avoid paying a hefty UK tax bill.
The Hospital Company, which won a private finance initiative (PFI) deal to build the Cosham hospital, sold off an 89.9 per cent share of the contract for a payment of £59.8m in July last year.
The firm which bought the debt was an investment firm called HICL Infrastructure Company, which was set up in Guernsey by the investment banking arm of HSBC.
Because it is based offshore it could end up entirely avoiding having to pay UK corporation tax, which currently stands at 26 per cent.
It means the UK economy could lose out on millions of pounds that would have been paid in tax under the original PFI deal.
Patient groups and unions feel the deal, which is legal thanks to a tax loophole, is morally wrong.
Jock McLees, chairman of Portsmouth Local Involvement Network, said: ‘It makes me quite angry.
‘It’s the fact that we have a hospital trust that is struggling to make ends meet and the money that’s paid by taxpayers to pay the mortgage is ultimately finding itself offshore to make money for investors and shareholders.’
Regional organiser of Unison, Mike Wilson, added: ‘It is a basic unfairness.
‘Tax loopholes such as the one which HSBC is exploiting in this situation should not be allowed.’
Director of Fareham-based tax advisors CW Fellows, Matthew Harrison, said companies’ financial planners sometimes found ways to get around UK laws which are designed to prevent tax avoidance.
He said: ‘It is hard to see why a UK company would be based in Guernsey if it wasn’t to take advantage of their very light tax regime.
‘Certainly HICL would be paying a lot more than their reported tax bill if they were based in the UK.’
In six months last year HICL is believed to have made more than £38m profit from 33 PFI schemes it has invested in, and paid only £100,000 in UK tax – less than half of one per cent.
Company spokesman Andrew Benbow said: ‘HICL is an investment company and seeks to distribute its profits to its shareholders such that there is no accumulation of profits offshore.
‘HICL aims to be as efficient as possible in distributing yield from underlying investments to its investors, the majority of whom are based, and taxed, in the UK.’