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ENERGY giant npower has dodged paying up to £108 million in UK corporation tax in the past four years — by funnelling cash to Malta.
More than half of the firm’s funding comes from German owner RWE via loans paid through a shell company based in the Mediterranean tax haven, The Sun can reveal.
Npower then pays back annual interest on the loans to the Maltese company — called Scaris.
The arrangement means the UK gas and electricity supplier can post a loss here, and avoid corporation tax.
Last night experts likened npower to the US coffee chain Starbucks, which dodged UK tax using similar sister firms.
Tax specialist Richard Murphy said: “Npower has shifted millions of profit to Malta — that can only be to save tax. If that isn’t tax avoidance I don’t know what is.”
The revelations will pile pressure on npower, which in 2010 managed to find £21million for a three-year deal to sponsor the ******** League.
And they will infuriate the company’s near seven million customers who are receiving record bills.
Despite the tax dodge, npower insists it has done “nothing wrong” and HM Revenue & Customs was “aware of everything”. But lobby group 38 Degrees demanded meetings with the firm.
Its chief David Babbs blasted: “Npower has been rumbled. By shifting this money through Malta, they avoid millions of pounds of tax.
"This is cash we sorely need to bring down the deficit and fund schools and hospitals.
"They claim it’s above board, but why else would they funnel profits made in the UK through a Maltese tax haven?”
RWE has paid about £2.3billion in loans to npower via Scaris since 2008, accounts show.
Last night expert Mr Murphy claimed npower would have paid tax on nearly £400 million of profits since that year if it had not made interest payments to Malta.
But £463million went to Scaris and other RWE firms over that period.
Mr Murphy said Scaris probably pays the money it gets from npower back to RWE in the form of a dividend — which escapes tax in Germany.
MPs were already angry with npower after its boss Paul Massara admitted two weeks ago the firm hadn’t paid corporation tax for three years.
He blamed its huge investment in wind farms — which gets a tax credit.
He then told a select committee the firm borrowed some cash from its German parent RWE but insisted it was “standard business practice”. There was no mention of Scaris.
Last night npower said: “HMRC are aware of everything here and still class us as a low-risk company. It’s sad to see this continued harrying of a company like ours that has invested billions into the UK.”
The money go-round
SINCE 2008, German owner RWE has funded npower with loans of around £2.3bn — paid via Malta-based subsidiary Scaris.
Npower then pays interest every year on the loans. And Scaris pays the cash back to RWE, most likely in the form of dividends.
Read more: http://www.thesun.co.uk/sol/homepage...#ixzz2RvvLSexA
More than half of the firm’s funding comes from German owner RWE via loans paid through a shell company based in the Mediterranean tax haven, The Sun can reveal.
Npower then pays back annual interest on the loans to the Maltese company — called Scaris.
The arrangement means the UK gas and electricity supplier can post a loss here, and avoid corporation tax.
Last night experts likened npower to the US coffee chain Starbucks, which dodged UK tax using similar sister firms.
Tax specialist Richard Murphy said: “Npower has shifted millions of profit to Malta — that can only be to save tax. If that isn’t tax avoidance I don’t know what is.”
Quiz ... boss Massara
The revelations will pile pressure on npower, which in 2010 managed to find £21million for a three-year deal to sponsor the ******** League.
And they will infuriate the company’s near seven million customers who are receiving record bills.
Despite the tax dodge, npower insists it has done “nothing wrong” and HM Revenue & Customs was “aware of everything”. But lobby group 38 Degrees demanded meetings with the firm.
Its chief David Babbs blasted: “Npower has been rumbled. By shifting this money through Malta, they avoid millions of pounds of tax.
"This is cash we sorely need to bring down the deficit and fund schools and hospitals.
"They claim it’s above board, but why else would they funnel profits made in the UK through a Maltese tax haven?”
RWE has paid about £2.3billion in loans to npower via Scaris since 2008, accounts show.
Last night expert Mr Murphy claimed npower would have paid tax on nearly £400 million of profits since that year if it had not made interest payments to Malta.
But £463million went to Scaris and other RWE firms over that period.
Mr Murphy said Scaris probably pays the money it gets from npower back to RWE in the form of a dividend — which escapes tax in Germany.
MPs were already angry with npower after its boss Paul Massara admitted two weeks ago the firm hadn’t paid corporation tax for three years.
He blamed its huge investment in wind farms — which gets a tax credit.
He then told a select committee the firm borrowed some cash from its German parent RWE but insisted it was “standard business practice”. There was no mention of Scaris.
Last night npower said: “HMRC are aware of everything here and still class us as a low-risk company. It’s sad to see this continued harrying of a company like ours that has invested billions into the UK.”
The money go-round
SINCE 2008, German owner RWE has funded npower with loans of around £2.3bn — paid via Malta-based subsidiary Scaris.
Npower then pays interest every year on the loans. And Scaris pays the cash back to RWE, most likely in the form of dividends.
Read more: http://www.thesun.co.uk/sol/homepage...#ixzz2RvvLSexA
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