Report exposes how four of five biggest health companies that lobbied in favour of health bill can keep taxes to a minimum

Leading private health firms hoping to benefit from the government's controversial NHS reforms have set up corporate structures that allow the avoidance of tax on millions of pounds' worth of profit, it can be revealed.

An investigation into the accounts of five of the biggest corporate names who lobbied in favour of health secretary Andrew Lansley's reforms has found widespread use of tax havens.

The complicated tax structures set up by the firms, or by their parent companies, make use of corporate entities in the British Virgin Islands, Luxembourg, Jersey, Guernsey and the Cayman Islands, according to a report entitled An Unhealthy Business compiled by the website Corporate Watch and revealed today by the Observer.

The revelations will raise the temperature of the debate ahead of the latest clash in the Lords over the health and social care bill which critics claim will usher in more private sector involvement in the NHS. Tomorrow Lord [David] Owen will propose an amendment to ensure that the bill will not advance until they debate the reasons behind the government's decision to withhold the risk register, a government document detailing threats to the NHS from the reforms. Labour will also table a motion calling for the bill not to pass from the Lords.

According to Corporate Watch, some of the firms or parent companies investigated are already able to minimise their UK tax liability or that of their investors, while others have set up structures that could ensure investors avoid big payouts in future. The investigation found:

■ Spire Healthcare, the UK's second largest private healthcare company, made an operating profit of £123m in 2010, but declared a loss of £53m for the same period because of a complicated corporate structure which uses a company based in Luxembourg;

■ Care UK, which operates NHS treatment centres, walk-in centres and mental health services, has a reduced tax bill by taking out loans through the Channel Islands stock exchange and coming to an agreement with HMRC;

■ Circle Health, which became the first private company to take over the management of an NHS hospital, is owned by companies and investment funds registered in the British Virgin Islands, Jersey and the Cayman Islands in an arrangement which allows investors to avoid tax on their shares;

■ Ramsay Health Care, the company with the greatest number of contracts in the NHS to provide services, has used a subsidiary in the Cayman Islands to finance the purchase of a French health company for its Australian parent;

■ General Healthcare Group's 37 hospitals are owned by 37 separate British companies currently registered for tax purposes here, but each of those British firms are in turn owned by firms in the British Virgin Islands, which would mean there could be no stamp duty to be paid by a future buyer of the land and property.

The accounts of companies in tax havens are not open to scrutiny and the revelations will fuel fears that the private sector's increased involvement in the health sector will see taxpayers' money being channelled out of the UK to investors abroad after the controversial reforms are implemented. None of the health firms' corporate structures is illegal and the companies who responded to queries from the Observer said that their structures allowed them to invest in health in the UK.

However, in the most startling case, Spire Healthcare, one of the biggest providers of healthcare services to the Department of Health, paid just over £3m in tax in the last three years, despite making an operational profit in the last year alone of £123m. Spire is a highly profitable business, with revenues rising by 4% to £643m in 2010. Profits were eaten away by the £108m in interest it had to pay on £1.3bn worth of bank loans, leaving £15m of taxable profit.

Yet in addition to the interest on the bank loans, Spire's accounts show how it paid a nominal £65m in interest on loans it owes to a Luxembourg-based subsidiary of its parent company, the private equity firm Cinven, meaning that it declared a £53m loss for tax purposes in 2010.

The company, the accounts show, only paid tax over three years after HMRC deemed some of their expenses "not deductible for tax purposes". A spokesman for Spire said its parent company had invested £250m in the last three years in the UK health market.

A spokesman for Care UK said: "Neither Care UK nor its majority shareholder, Bridgepoint, have introduced any kind of tax-avoidance scheme."

General Healthcare Group said: "The properties in GHG are not directly owned by BVI incorporated entities; they are all owned by UK incorporated and UK tax resident companies. To date, any properties sold have been asset sales by the UK incorporated entities that own them, and tax on capital gains has been paid where applicable, for example UK tax has been paid on the sale of the Harrogate property last year."

Ramsay Healthcare did not reply to inquiries. Circle Holdings declined to comment.

• The headline to this article was changed on Sunday 18 March