Wednesday, November 13, 2013

Private providers are tax cheats

Who'd have thunk it? The private companies providing outsourced services to the UK government are tax cheats:

Two of the country’s biggest private contractors paid no corporation tax in Britain last year, despite carrying out billions of pounds of taxpayer funded work for the Government, an official audit has found.

A report by the National Audit Office, published today, disclosed for the first time how much Government work is now outsourced to the private sector.

It found that the four biggest suppliers - Atos, Capita, G4S and Serco - carried out £6.6billion-worth of work for the public sector and central Government last year.

Yet two of them – Atos and G4S which carried out £2billion-worth for work for the Government and public sector – paid no corporation tax at all in the UK in 2012. Capita paid between £50million and £56million, while Serco paid £25million in tax.

As Margaret Hodge, head of the Public Accounts Committee points out, its particularly gallign when companies which derive their revenue primarily from government contracts cheat on their taxes. Of course, there's an obvious solution: ban such tax-cheating companies from competing for contracts. That ought to promote compliance.

(Meanwhile, Serco New Zealand, which runs the Auckland Central Remand Prison under contract, seems to be paying its taxes for now. I guess they've figured that we won't tolerate that shit here...)