Scotia Gas, 50 per cent of which is owned by SSE, the energy giant which is about to put its prices up by more than 8 per cent, has avoided an estimated £72.5m in tax. UK Power Networks and Electricity North West, responsible for running large sections of Britain's electricity network, have both saved more than £30m.
More than 30 UK companies have cut taxable profits by racking up interest on debt from their owners. In doing so, this minimises – in some cases wipes out – their UK corporation tax bill. As most of the owners are based abroad, 20 per cent of the interest payments would usually have to be sent straight to HMRC, minimising the overall saving. But as the money is lent via offshore stock exchanges that qualify for a regulatory loophole called the "quoted Eurobond exemption", no tax is withheld.
The revealing extent of the avoidance prompted Labour leader Ed Miliband to say yesterday: "Since David Cameron has been Prime Minister, energy bills have gone up by an average of £300 because he has refused to stand up to big energy companies. On top of failing to address the broken energy market, David Cameron is failing to stamp out tax avoidance. We have a prime minister unwilling to take the side of hard-working people. Unwilling to act against the energy companies, unwilling to clamp down on tax avoidance and close down tax loopholes."
The revelations are part of a joint investigation with Corporate Watch, a not-for-profit research group.