Virgin Care Hits Back At NHS Privatisation Claims In West Lancs

…is the headline in The

And there it is, the usual claim that out of the goodness of his heart “Health group claim boss Richard Branson does not seek to make a penny from the NHS…” after a letter to the Champion.

Of course not, he’s filthy rich by using his skill in using money to make more money. Virgin Care has never made a profit…except in the tax free British Virgin Islands!

“Research also found that Virgin Care borrows money solely from a Virgin holding company and reports that it will repay that loan, which will be corporation tax-deductible, when a profit starts to be recorded. That holding company is based in the UK but it, in turn, owes money to other parts of the Virgin business, whose ultimate parent company is in the British Virgin Islands. This type of corporate set-up has potential for reducing or eliminating the tax liabilities of operating companies; a company in the UK could always report a loss due to loan repayments to sister companies thereby never having to pay tax”.

West Lancashire Urgent Care And Community Care

Virgin Care was awarded two five-year contracts together worth £65 million in December 2016 by West Lancashire CCG. The community health services contract is worth £45 million and the urgent care services is worth £20 million; both started on 1 April 2017. The services include district nurses, community matrons, IV therapy, end of life teams, GP out of hours and walk-in centres. The current provider, Southport and Ormskirk Hospital NHS Trust, was not shortlisted for the contracts.

Virgin Care has become a major player in the market for NHS services since it entered the healthcare market in 2010. Over the past seven years the company has been awarded contracts worth well over £2 billion, with several large contracts in community health.

Virgin Care has probably been the most active private company in the area of NHS contracts for community health and in 2016 the company made the move into adult social care. In early 2020, Virgin Care reported on its website that it operates over 400 NHS services around England; despite the scale of its business the company shows no signs of making a profit. Indeed, according to its accounts, since 2010 the company has recorded an annual loss in the UK.

As Virgin Care Ltd makes no profit in the UK, the company pays no tax in the UK. However, Virgin Care Ltd is a small entity in Richard Branson’s Virgin empire.

Legal challenges

Virgin Care has been very successful in winning contracts with the NHS, but if it does not win, the company will turn to the courts. In December 2017, Virgin Care was awarded a five year contract for the 0-19 year healthy child programme by Lancashire County Council. However, following a legal challenge by the NHS trusts’ who were currently carrying out the work a judge overturned the decision in June 2018 stating that the scoring process by the council was flawed. The NHS trusts’ continued to run the service until April 2019 whilst the council re-evaluated the bids. In October 2018, following a re-evaluation of the bids, the council re-awarded the contract to Virgin Care.

So, just for clarity, the ultimate parent is Virgin Group Holdings Ltd registered in the British Virgin Islands whose beneficiaries are Richard Branson and his family. The British Virgin Islands are a tax haven and entities registered there pay no tax. As a result of the link with the British Virgin Islands, questions have been raised over whether tax would be paid in the UK if Virgin Care made a profit.

So why was he knighted? “In March 2000, Branson was knighted at Buckingham Palace for “services to entrepreneurship”. For his work in retail, music and transport (with interests in land, air, sea and space travel), his taste for adventure, and for his humanitarian work, he has become a prominent global figure”.

You couldn’t make it up!

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