Home Journalism So, Revera Dodges Taxes, Does It?

So, Revera Dodges Taxes, Does It?



Another one of the tax justice groupuscules wishes to tell us that Revera – a manager of care homes – dodges UK taxation.

As we’d expect from a groupuscule connected to Tax Justice the report is less than sensible.

A Canadian care home operator has been accused of using aggressive tax avoidance to extract profits out of its UK residences.

Revera, which owns 56 care homes in the UK, uses complex schemes to route profits from its homes through the tax havens of Jersey, Guernsey and Luxembourg, according to a report by the Centre for International Corporate Tax Accountability and Research, published yesterday.

The report says that profit-shifting such as that allegedly undertaken by Revera “indicates that investor-owned UK care companies have consciously chosen to extract profits rather than increase spending on higher staffing levels and better-quality care”.

Hmm, OK. The report is here:

Welltower – with 123 UK care homes valued at
US$2.9 billion – is one of the largest investors in
UK care homes.9
The following table compares the profits reported
by Welltower on its investments on UK care
homes with Revera to the losses reported by the
three Revera-controlled top-level UK operating
companies. On the same 56 UK care homes,
while Welltower reports net operating income
of US$84.8 million, the 3 operating companies
report combined losses of US$12.6 million.
How does that work?

Well, how that actually works is that Welltower is reporting net operating income and the other companies are reporting profit/loss. As these are different things therefore the result are different. From the Welltower accounting explanation:

Net operating income (NOI) is used to evaluate the operating performance of our properties. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our seniors housing operating and medical facility properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent costs unrelated to property operations or transaction costs. These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets.

So, what’s not in there? The cost of the properties themselves. Which, as we might expect, for a REIT – a company which exists to own and operate property – a substantial part of the cost of being in business. To be ever so slightly more accurate, what’s not in there is the cost of financing that $2.9 billion estate.

This bit:

That’s for the company as a whole, not just the UK segment.

Just in case you’d like to have a career in tax justice this is how you do it. Compare to financial measures which are entirely not the same at all and denounce the evil capitalists as bastards. Pass Go and collect your £200 grant.

Because, seriously, that’s what they’ve just done. They’ve compared one set of profits/losses after the costs of financing the property that the business is conducted in to another set of figures that don;t include the costs of financing the properties the business is conducted in.

And, yes, financing the property the business is conducted in is indeed a legitimate expense to be considered when charging a tax upon profits.

How much you think this makes them lying scumbags is entirely up to you, I couldn’t possibly comment.



  1. The interesting question, of course, is whether they are lying or stupid. Either way they should not be published in respectable places.


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