Bristol moves to scrap NHS tax avoidance rule

Multinational companies which avoid tax could be allowed to bid to run NHS services in Bristol after local commissioners moved to scrap a national rule.

Bristol Clinical Commissioning Group (CCG) is proposing to get rid of a clause which prevents companies paying little or no tax in the UK from successfully bidding to run public services.

The group said it had taken the move in order to avoid legal challenges after its lawyers advised them the current rules were too ambiguous, leaving them open to legal challenges.

The move comes after Bristol CCG’s recent re-tendering of children’s services for which a bid was submitted by Virgin Care, a company which has been accused of having a structure which includes tax havens.

Virgin Care lost out in the end to a public and charity partnership. The commission denied that the current rules had been used to block any bidders in the past. Virgin Care denied making a complaint about the anti-tax avoidance clause and added that the company has always paid its UK taxes in full.

Union Unite has attacked the move by Bristol CCG, calling “Google-style” tax arrangements for global companies payed by the NHS a “national scandal”.

Dr Charlotte Paterson, a Bristol activist, added in an interview with the Independent: “Tax avoidance may be legal, but the CCG is also required to take ethical and moral issues into consideration.”

The original clause, included in CCG’s constitutions across the country following a public protest, was drafted on the advice of QCs Rebecca Haynes and Stephen Cragg of Monckton Chambers and Doughty St Chambers.

Bristol CCG adopted its constitution in 2012, but have now moved to strike out the restrictions.

The group said in a statement: “It has now been brought to our attention that the wording of this specific amendment is ambiguous and could leave us open to legal challenge.

“If bidders comply with tax law and are not in breach of any obligations to pay taxes and obligations regarding social security contributions then we should not exclude them from procurement processes as this would be discriminatory.

“Our solicitors have advised us that if we exclude bidders, assuming that their arrangements are lawful, we would be vulnerable to a legal challenge on the basis we are acting contrary to procurement law.”

The group also told the Health Service Journal that “the current provision had not been used to exclude any bidder in the past, and no organisations had challenged the group in relation to the wording”.

A spokesperson for Virgin Care said: “Virgin Care is a UK company, domiciled in the UK. We have always paid our UK taxes in full and will continue to do so.”

Bristol CCG are currently holding a public engagement exercise on the changes before its GP membership is asked to vote on the new rules in March.