Malta prominent in latest UK controversy on tax dodging
Malta has again been labelled a tax haven as it features in the latest controversy on tax dodging by giant companies in the UK. The Sun newspaper reports that energy giant npower has dodged paying up to £108 million in UK corporation tax in the past...
Malta has again been labelled a tax haven as it features in the latest controversy on tax dodging by giant companies in the UK.
The Sun newspaper reports that energy giant npower has dodged paying up to £108 million in UK corporation tax in the past four years — by funnelling cash to Malta.
npower sponsors the English football league.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 newspaper said.
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 in the UK, and avoid corporation tax.
"The revelations will pile pressure on npower, which in 2010 managed to find £21million for a three-year deal to sponsor the Football League.
And they will infuriate the company’s near seven million customers who are receiving record bills," the newspaper said.
Despite the tax dodge, npower insists it has done “nothing wrong” and the authorities were “aware of everything”.
But lobby group 38 Degrees demanded meetings with the firm, with its CEO, David Babbs, arguing that this tax cash was sorely needed in the UK 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?”
Tax specialist Richard Murphy told the newspaper 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.