11.19 Taxation rates are expected to vary over time but the nature of PPP is that the private sector takes the risk of taxation increases. Consequently it is usual for the model to incorporate one tax rate. The taxation calculations are usually fairly complicated and are expected to be accurate. As it is unusual for the project company to share any benefit attributing to complex taxation saving structures that may be built in over time, participants should be expected to have taken advice and to have structured the project in a tax efficient way. COPIC requirements must be adhered to as well as the relationship between tax and financial accounting considered.
11.20 Consequently in respect of tax, the NHS body should ensure that the assumptions used by all of the participants are correct and that any tax schemes incorporated into the financial model are feasible. If not, the tax scheme should be excluded for the purposes of comparison, as the company and its funders will not bear the risk of major tax schemes failing to work.