UK water companies avoid paying tax - Telegraph
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 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".
The research company noted that Northumbrian Water was the “most brazen” case, paying 11pc on just over £1bn of loans from its owners, the Hong Kong-based Cheung Kong group run by Li Ka-Shing, the world’s ninth-richest person.
Over the next full tax year, more than £100m will be deducted from Northumbrian’s profits just from the shareholder loans, potentially avoiding around £24m in UK corporation tax, the research group said.
The UK Treasury nearly closed the Eurobond loophole last October, noting that some companies were using it “for the purpose of circumventing the requirement to deduct tax at source rather than being directed at the raising of third party finance”. However, it decided against it.
Funny how HMR&C have ignored this. I bet they are all Tory party donors?
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 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".
The research company noted that Northumbrian Water was the “most brazen” case, paying 11pc on just over £1bn of loans from its owners, the Hong Kong-based Cheung Kong group run by Li Ka-Shing, the world’s ninth-richest person.
Over the next full tax year, more than £100m will be deducted from Northumbrian’s profits just from the shareholder loans, potentially avoiding around £24m in UK corporation tax, the research group said.
The UK Treasury nearly closed the Eurobond loophole last October, noting that some companies were using it “for the purpose of circumventing the requirement to deduct tax at source rather than being directed at the raising of third party finance”. However, it decided against it.
Funny how HMR&C have ignored this. I bet they are all Tory party donors?
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