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Skipton MP Julian Smith calls on Yorkshire Water to pay more tax
11:00am Friday 16th August 2013 in News
Skipton MP Julian Smith has called on Yorkshire Water to pay more tax.
He has launched a campaign to ensure the business, which paid no Corporation Tax last year while making pre-tax profits of £186m, contributes to the Treasury.
And while Yorkshire Water was enjoying tax credits, its customers saw bills rise by about £12, to an average of £368 per year.
Mr Smith, who said Yorkshire Water had done nothing illegal by minimising its tax bill, is seeking cross-party support to ensure the Bradford-based company pays more tax.
He has called on all Yorkshire MPs to attend a meeting next month to grill Yorkshire Water bosses at Westminster and is also contacting industry regulator Ofwat whose chairman Johnson Cox – a former Yorkshire Water boss – has said that tax-reducing corporate structures of some water companies were “morally questionable”.
Mr Smith said: “This campaign is aimed at shaming Yorkshire Water into paying more tax. While the company has done nothing illegal, there’s a definite moral question about its minimisation of tax liabilities which I’m sure will not go down well with hard-pressed consumers.
“I want MPs of all parties to join me and would also urge readers to voice their opinion as Yorkshire Water customers. The company supplies the most natural of natural products and the current situation is unsatisfactory.
“I built up a small business myself and paid all taxes due – as do all the businesses I know in my constituency. I will speak to Ofwat to see if anything can be done.”
Mr Smith said a windfall tax would be one way to recoup money from businesses using the current rules to minimise their tax liabilities.
Yorkshire Water is part of the Kelda Group which was delisted from the London Stock Exchange in 2008, following acquisition by the infrastructure fund Saltaire Water which is a consortium of four investment companies including Citigroup and HSBC.
Research by Charlie Elphicke, MP for Dover and Deal, has revealed Britain’s privatised water firms had used legal loopholes to dodge more than £1bn in tax since the election.
Speaking in the Commons in June, Mr Elphicke singled out Yorkshire Water as an “especially egregious” example of firms paying little tax. He told MPs the company had generated £990m in operating profits over the past three years and benefited from a net tax credit worth £46.2 million.
A Yorkshire Water spokesman said: “This year we have gone beyond our regulatory requirements and published comprehensive information about the company to build greater public understanding of how we operate.
“As a wholly UK tax resident company, we pay our tax in full and in total compliance with the rules of HM Revenue and Customs.”
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