Department of Health

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Composite trader

  • Last modified date:
    14 February 2007
This sets out the Inland Revenue position and qualifying criteria for composite trader that enables project companies in PFI deals to reduce their tax burden and to pass the full benefit of the saving through to Trusts. The Standard Form 3 PFI contract has now been drafted on the basis that the site will be licensed rather than leased and that NHS PFI deals generally can take advantage of the application of composite trader. Whether or not it is possible to take the benefit of this tax treatment should always be a project company risk.

It is no longer necessary for DH approval to be sought before adopting this approach.  However, there are circumstances, for example where the site is selected by project company  rather than the Trust or where project company enjoys sole occupation of an area this may need to be leased, rather than licensed to project company.  Amendments to Clause 14 may be required and these should be agreed with PFU at the earliest opportunity.

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