Npower has announced that it will put up energy bills by 10.4 per cent from 1 December – the highest price rise so far by any supplier.
Yet it was reported in April of this year that, despite raking in an estimated £766 million in profit over the last three years, the company paid no corporation tax.
Npower chief executive Paul Massara was asked in April by the Commons Energy Select committee how much corporation tax the company had paid in the years 2009, 2010 and 2011.
Massara replied: “We will not have paid corporation tax in those three years. There is a very simple reason why, because effectively we have invested £5bn in the last five years building power plant, creating jobs, creating employment and helping to keep the lights on.”
Ian Lavery, Labour MP for Wansbeck, replied: “I’m sorry but I’m absolutely amazed that you haven’t paid any … It absolutely is a surprise.”
As tax expert Richard Murphy put it at the time: “Npower was structured so that interest was paid from its UK operation to cancel profits earned, and since that interest was 99 per cent due in inter-company loans that looked like deliberate tax structuring to me.”
Last year profits at Npower increased by 25 per cent to £390million soon after it imposed large price rises on customers.
The company, owned by German utility firm RWE, saw profits from its UK customers and power stations increase by £77million from £313million.
It also recently emerged that Npower bosses have paid out £35million in bonuses in the past five years while customers’ bills have skyrocketed.
Left Foot Forward recently reported that energy company SSE, another firm which has bumped its price up just in time for winter, makes £1,500 a minute in profit. We also looked at three reasons Labour should not be bullied by fat cat energy bosses.