Northumbrian Water’s billionaire owner and the company’s tax affairs will be the focus of a documentary being aired tonight in the North East.
According to BBC current-affairs investigations programme Inside Out, the region’s water firm, which is owned by Hong Kong’s Li Ka-shing – the richest man in Asia, has made more than £630million profit in the last two years, but pays on average less than 10 per cent tax because of a legal loophole.
Northumbrian Water told the BBC that the company always acts transparently and within the letter of the law, adding that it is not in dispute with HM Revenue and Customs on its tax affairs.
In the last two years, the company has paid less than 10 per cent tax on £630million of profit (standard corporation tax is 20 per cent) because it has borrowed £1billion from Mr Li, presenter Chris Jackson will claim in tonight’s documentary.
He will tell viewers: “Northumbrian Water sounds nice and local, but when you pay the bill, you may be surprised to learn the profits leach away to the other side of the world. The taxman is left feeling a little dry.”
The Government has looked at closing the tax loophole – which is completely legal – but decided against it. A statement from the Treasury said recent analysis showed changing the system used by Northumbrian Water would not save money and would undermine the competitiveness of the British economy.
The full story can be seen on Inside Out (North East and Cumbria) on BBC One at 7.30pm today. It will also be available on the BBC’s iPlayer for 30 days.