Private rail firms pay out huge dividends

Private companies responsible for supplying trains to the railways have been paying massive dividends totalling around £1.2 billion to their shareholders instead of investing in hundreds of new vehicles, according to research carried out by the RMT rail workers’ union. 


The research also found evidence that these same rolling stock companies (ROSCOs) have been moving money into overseas firms based in Luxembourg to avoid taxation.


The RMT report, The ROSCO racket investigated the company accounts of the three companies who owned 87% of the UK’s rolling stock between 2012 and 2018 and traced their ownership structures. 


This uncovered the firms’ use of Luxembourg-based companies set up with the sole intention of channelling money up through company structures without paying tax. According to the union, the three companies paid £1.2 billion in dividends to their shareholders between 2012 and 2018 — enough to fund 700 new vehicles. And figures on inter-company lending suggest this is just the tip of the iceberg.


RMT general secretary Mick Cash said the figures should be a wake-up call for the new transport secretary. 


And he said because of the companies’ “shady group structures” and their use of firms in low tax regimes and tax havens, “we’ll probably never know how much they’ve salted away from our railways”.

https://www.rmt.org.uk/news/publications/the-rosco-racket-why-its-time-to-take-control-of-uk-rolling