Friday, 15 February 2013

UK water companies avoid paying tax


Six water companies have avoided paying millions in tax by routing profits through tax havens and using a legal loophole which the government recently chose not to close, according to research by Corporate Watch, which combed through the finances of the 19 utility groups.

The findings comes just a week after the water regulator Ofwat announced that water bills would rise by 3.5pc on average to £388 a year, promising to “make sure customers get value for money”.

Northumbrian, Yorkshire, Anglian, Thames, South Staffordshire and Sutton and East Surrey Water all borrowed from subsidiaries of their owners based overseas, according to the research.

The interest payments on the loans reduce the water companies taxable profits in the UK and, due to a regulatory loophole, go to the owners tax-free.

The owners issue the loans through the Channel Islands stock exchange as "quoted Eurobonds".

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