There seems to be a slight difference as to how much profit the company has made:
The UK\’s largest water company is accused of \”ripping off the taxpayer\” after revealing it paid no corporation tax and pocketed a £5m credit from the Treasury in a year when it made £550m in profits.
That\’s The Guardian. The Telegraph has:
In the year to March 2013 Thames’s pre-tax profits fell 35pc to £144.9m owing to bad weather, unpaid customer bills and rising energy costs. The company booked a £5.1m tax credit and said that although it paid no corporation tax it paid business rates and other taxes which amounted to about £150m.
So which is the correct profit figure? My suspicion would be that the G has given is the gross profit figure.
As to why there\’s no corporation tax:
A spokesman for Thames Water said: \”We have not paid much corporation tax in recent years because the government\’s tax system allows us to delay, not avoid, payment of tax based on how much we invest. Because we are investing £1bn a year from 2010 to 2015, more than any water firm in the UK\’s history, we are able to defer a lot of tax payments to future years.\”
So, capital allowances then. This appears to be causing outrage:
Simon Hughes, deputy leader of the Liberal Democrats, as well as the MP for Bermondsey and Old Southwark, described Thames Water\’s annual accounts as \”another extraordinary chapter\” in their recent history. \”With Thames Water ratepayers facing a huge and permanent hike in their annual bills to pay for the Thames tunnel, escaping tax liability is not ethically or financially acceptable.\”
Dave Prentis, general secretary of the public sector union Unison, said it was time for the government to think again about who owns the water industry. \”This is a disgrace. Since privatisation, water companies have been ripping off consumers, pushing bills up much higher than inflation,\” he said. \”Now we know they are ripping off the taxpayer too.\”
Can anyone, perhaps we might ask Mssrs. Hughes and Prentice this, think of a feasible tax system that did not have a method of allowing for capital expenditure?
And in the Mail:
Thames Water made profits of £549million last year after sales rose six per cent to £1.8billion.
Don\’t people have a feel for these sorts of numbers? A price regulated business just isn\’t going to be making net profits of 30% or so of sales. Gross profits before financing and or capital costs perhaps.