Sir Richard Branson's Virgin Care Services sees revenues jump 50% amid NHS privatisation row
Company made £8m annual profit but paid no corporation tax because its parent company lost money
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Your support makes all the difference.Sir Richard Branson’s Virgin Care Services saw a 50 per cent rise in revenues to £200m in its latest financial year, helped by a series of new NHS outsourcing contracts.
The company made an £8m profit in the year to the end of March 2017 but paid no corporation tax, its latest accounts show. That was because the company is part of the larger Virgin Care group, the parent company of which declared a loss of £19.3m.
The web of companies is ultimately owned by a company registered in the tax haven of the British Virgin Islands, where Sir Richard is domiciled.
Virgin Care claimed this corporate structuring makes no difference to the amount of tax it pays in the UK.
Virgin Care Services began work on three large new NHS contracts in 2017: A £64m, five-year contract in Wiltshire, another seven-year deal in East Staffordshire worth £270m and a £126m, seven-year contract with Dartford, Gravesham and Swanley Clinical Commissioning Group and NHS Swale Clinical Commissioning Group.
The company’s rapid growth comes as Theresa May finds her Government under renewed pressure over increasing privatisation of NHS services.
In Prime Minister’s Questions this week, Jeremy Corbyn accused the Government of allowing NHS funds to be “siphoned off into the private sector”.
“The Prime Minister needs to understand that it’s her policies that are pushing the NHS into crisis,” Mr Corbyn said.
A spokesperson for Virgin Care said that its subsidiary paid no corporation tax because the profit figure declared in the annual results does not take into account many of the other costs that the broader business incurs.
Costs for support services such as human resources and IT are borne by other companies in the group meaning the finances of all of the companies should be assessed as a whole, the spokesperson said.
In a statement, the company added: “Because our main shareholder continues to invest in growing the business, we are yet to make an overall profit.
“Being UK domiciled, we pay our taxes in full in this country and that will be the case when we are profitable too.”
Virgin Care caused controversy in November after NHS bodies paid the company fees, reported to be hundreds of thousands of pounds, to settle legal action.
Virgin Care sued the NHS after it lost out on an £82m contract to provide children’s health services across Surrey, citing concerns over “serious flaws” in the way the contract was awarded.
More than 75,000 people have signed a petition for the company to return the cash.
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