- Thames Water and Anglian Water understood to have paid no corporation tax on profits
- Yorkshire Water thought to have kept payments in low millions
- All three made hundreds of millions of pounds and paid staff bonuses
- News comes as bosses appear before MPs to explain their slashed tax bills
Three of Britain’s biggest water companies paid little or no tax on their profits last year, it emerged yesterday.
Thames Water and Anglian Water are understood to have paid no corporation tax on the profits made from their utility businesses.
Yorkshire Water is thought to have kept its payments to HM Revenue & Customs in the low millions. All three made hundreds of millions of pounds of operating profit and have rewarded bosses and shareholders with huge performance-related bonuses and dividends.
Thames Water has a company turnover of £1,694.9million and an operating profit of £643.9million but paid no corporation tax in the 2012 financial year.
Martin Baggs, its chief executive, was given a bonus of £420,000 on top of his £425,000 salary and is in line for a further windfall of £1million based on company performance through to 2015.
Anglian Water also paid no corporation tax despite a turnover of £1,138million and operating profit of £492.1million. Its managing director, Peter Simpson, received £300,000 in basic pay plus bonuses of £397,000 and £229,700. Yorkshire Water had a turnover of £893.6million and operating profit of £303.3m, but paid only £2.9million in corporation tax.
The revelation came as bosses from three of the world’s biggest corporations will today appear before MPs to explain how and why their companies slash their tax bills.
The Public Accounts Committee will quiz executives from Google, Starbucks and Amazon. They want to find out how big businesses manage to pay so little tax here despite huge sales.
The three American giants were revealed to be using complex legal techniques to funnel profits overseas, allowing them to pay relatively small tax bills.
Starbucks has handed only £8.6million to the Treasury in 14 years of trading in Britain, despite sales of £3billion. The committee, led by Margaret Hodge, is expected to ask Matt Brittin of Google UK, Starbucks’ chief financial officer Troy Alstead and Andrew Cecil, director of public policy at Amazon, what exactly their businesses do in the UK.
Yesterday Japanese car-maker Nissan was added to the list of shame as the Mail on Sunday revealed it paid only £11million of corporation tax last year – less than the amount it paid in 2005 and 2006 and despite a 50 per cent increase in car production since then.
HMRC recently revealed a £32.2billion ‘tax gap’ – the difference between the amount of tax it reckons should be collected in the UK and the money that ends up flowing into the Exchequer’s coffers.
It is down to tax avoidance, where companies and individuals use legal loopholes to minimise the amount owed, and evasion, where they illegally dodge paying.