THAMES WATER has been accused of avoiding paying tax on £145m pre-tax profit after its latest accounts showed it paid no corporation tax in the last financial year.
The company instead has deferred payments by taking advantage of capital allowances set in place by the government while it embarks on a £1bn upgrade to its pipes.
“We make no apology for taking advantage of capital allowances,” spokesman Simon Evans told the BBC. “We are investing £1bn a year in order to replace and repair our old, leaky water pipes and sewers. The more we invest, the more we can defer in tax payments. That’s tax that’s not avoided, it’s just delayed to future years.”
Due to the company’s investment over the last three years, he said, no corporation tax has yet been paid for those years.
However, some have accused the company of “ripping off the taxpayer”.
General secretary of the union Unison Dave Prentis said: “This is a disgrace. Since privatisation, water companies have been ripping off consumers, pushing bills up much higher than inflation. Now we know they are ripping off the taxpayer too.
“It is time for the government to think again about who owns the water industry. The current private monopoly is the worst of both worlds. We need a root and branch review to make sure the industry is run in the interests of consumers not profits.”
The figures come hot on the heels of criticism by chairman of industry regulator Ofwat Jonson Cox, who wrote in the Telegraph that tax-mitigating structures utilised by water companies was “morally questionable”.
In February, six water companies were accused of using offshore facilities to save tax on a collective figure of £3.4bn.
Thames Water’s pre-tax profits fell 35% last year, which it blamed on poor weather and a rise in unpaid bills. Revenues rose, however, to £1.8bn.
The application of robotics in finance functions is moving faster than predicted. Although, companies are cautious in how they are applying artificial intelligence to ensure results first, many are stepping up their investigations
EU competition commissioner Margrethe Vestager has defended the decision to order technology giant Apple to pay €13bn (£11bn) in back taxes to the Irish government
Carillion has announced the appointment of a new finance director as it reported a rise in first half profits and sales led by strong growth in its support services business
The UK inflation rate hit its highest level in almost two years in July, suggesting that the sharp fall in sterling following the UK referendum to leave the European Union is forcing prices up