Thames Water pays no corporation tax on £1.8bn turnover
At one time local authorities used to supply water, run hospitals and manufacture gas. Just imagine how positive this story would be if the profits were going to the local authorities where the consumers lived rather than private individuals. Makes you think? The story tells us:
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.
Thames Water, which serves more than a quarter of the population and had a turnover of £1.8bn, saw pre-tax profits slide 9% from £604m the previous year.
At the same time bills went up 6.7%, 646m litres of water a day were lost through leaky pipes and hundreds of ratepayers saw their homes flooded with sewage.
In a year when the utility admitted that its customer service was “still far from desirable”, chief executive Martin Baggs was awarded a pay rise of 5.9%, taking his basic salary to £450,000.
Baggs also scooped a bonus of £274,000 as part of a scheme to “reward significant improvement in the group’s financial and corporate performance” and next month will pick up a further £366,000 in shares under the company’s long-term incentive plan.
Thames Water said in its annual financial statement on Monday that it had not paid any corporation tax in the year to the end of March 2013. During this period, turnover rose 6% to £1.8bn.
The company said it paid £150m in business rates, national insurance and other taxes. It is currently seeking government support for the planned £4.1bn “super sewer” under the Thames.
The tax disclosure came as Jonson Cox, chairman of regulator Ofwat, wrote in an article in the Daily Telegraph that the high profits and tax-reducing strategies of some water companies were “morally questionable”.