Power giants are using a legal loophole to avoid paying millions of pounds worth of tax, The Independent on Sunday has revealed. Scotia Gas, UK Power Networks and Electricity Northwest have reportedly saved £140 million between them in such deals.
Gas distribution firm Scotia Gas, UK Power Networks and Electricity Northwest have avoided paying a total of £140 million in tax by racking up interest on debt from their owners, according to a report by The Independent on Sunday.
Tax bills are reduced by a legal procedure that sees the firms' owners lend it money through the Channel Islands Stock Exchange rather than investing it in shares. Scotia Gas avoided paying £72.5 million and UK Power Networks saved £38 million and Electricity Northwest £30 million by similar deals.
Scotia Gas and Electricity Northwest declined to comment on the allegations, while UK Power Networks told the Press Association that it "fully complies with all applicable regulatory, tax and legal requirements relevant to a group operating in the UK".
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