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Yorkshire Water denies it’s dodging tax payments
Yorkshire Water bosses have been accused of using a tax dodge to boost profits as consumers’ bills continue to soar.
But the Bradford-based utility company has refuted the accusation, saying it pays all the tax it is liable for and is open and honest about its accounts.
Yorkshire Water had been accused after an investigation by Corporate Watch, a not-for-profit investigative co-operative, into the finances of 19 water and sewerage companies in England and Wales It accused them of using a regulatory loophole to offset the cost of high interest loans from their owners through the Channel Islands stock exchange against tax on their profits.
Corporate Watch said: “The Yorkshire Water group, which is owned by investment funds based in the US, UK and Singapore, and HSBC bank, accrued £66 million in interest payments on £844 million of quoted Eurobonds in 2012.
“This, together with the interest payments on its other debt, helped it pay just £100,000 in corporation tax on an operating profit of £335 million in 2012.”
Corporate Watch said it asked the company for a comment but did not receive a reply.
Looking at the national picture, it claimed nearly a third of the money spent on water bills goes to banks and investors as interest and dividends, meaning consumers were paying £2 billion more a year – about £80 per household – than if the water and sewerage supply was publicly owned.
The body claimed seven water companies were avoiding millions in tax by routing profits through tax havens, while the chief executives of the 19 water companies were paid almost £10m in salaries and other bonuses in 2012.
Corporate Watch said banks and investors were making millions of pounds out of water companies as bills soared to an average of £388 a year. It claimed the latest average rise of 3.5 per cent in water bills would push more people into debt.
Corporate Watch said water companies and related businesses had amassed £49 billion in total borrowings. They paid more than £3 billion in interest payments last year in addition to £884 million in dividends to their owners.
Yorkshire Water said: “As a wholly UK tax resident company, we pay our tax in full and in total compliance with the rules of Her Majesty’s Revenue and Customs (HMRC).
“We make a massive contribution to the regional economy, investing more than £1 million every day to improve drinking water quality, bathing water quality and to help ensure communities are better protected from flooding.
“We also directly employ more than 2,500 people in Yorkshire and, through our investment, we have created hundreds more jobs working with over 1,000 local suppliers.
“We have always been nothing less than completely open and honest around our accounts, which are independently audited by HMRC, and publically available via our website.
“We play by the rules. If people however believe that these rules need to be changed, then that is an issue for Government and we’re very happy to play a part in any future debate.”