UK Care Homes Shift Profits Offshore According to Report

LONDON, Feb. 23, 2021 (GLOBE NEWSWIRE) -- A new report – Darkness at Sunrise: UK Care Homes Shifting Profits Offshore? – by the Centre for International Corporate Tax Accountability & Research (CICTAR) and Public Services International (PSI) reveals that UK care homes shift profits offshore while charging thousands of residents £200 in daily fees. Ownership through tax havens enables the more than 60 care homes to report losses in the UK while foreign investors make a killing in a sector subsidised by public spending. COVID-related deaths in UK care homes have exposed the need for major reforms which must include greater financial transparency to ensure that care is prioritised over profit.

Operated by Sunrise Senior Living, Gracewell Healthcare and Signature Senior Lifestyle, the care homes are controlled by PSP Investments, a Canadian government pension fund. The report exposes a detailed case study of a much broader problem. The UK’s care sector is dominated by private equity firms with a track record of aggressive tax dodging.

Christina McAnea, general secretary of UNISON, the UK’s largest union, said, “The scale of tax avoidance across the UK care home sector is deeply concerning. Urgent reform is needed to raise standards and ensure companies are accountable. The entire​ care system has been underfunded and understaffed for too long. Unscrupulous employers have been allowed to exploit workers and put residents at risk, while taking the profits and shifting them offshore.”

Welltower, a major US real estate company, is a minority partner in these UK care homes and owns over 120 UK care homes in total. In 2019, Welltower’s share of profit on these homes was an estimated £64 million. “Profits reported to shareholders, reveal what is usually kept hidden,” said Jason Ward, the author of the report. “Complex corporate structures using tax havens artificially create losses to avoid UK tax.”

In Canada, the pension fund owns the second largest care home operator which faces scrutiny for COVID-19 deaths and growing calls for public ownership. Mark Hancock, National President of the Canadian Union of Public Employees (CUPE), which has 65,000 members working in long term care said, “Aggressive tax avoidance adds insult to injury, and shows profits are prioritized over improving care. This is an embarrassment for Canadians.”

Eva Joly, an ex-Member of the European Parliament and ICRICT commissioner said, "This important report raises critical questions about how the care sector is funded and regulated, not just in the UK, but across the EU and globally. The use of Luxembourg is particularly telling, given the recent revelations about that tax haven at the heart of Europe.”

https://cictar.org/