MP John Robertson calls for official tax inquiry into npower

Npower admitted to energy and climate change select committee that it had paid almost no corporation tax for three years

A row over alleged tax avoidance by npower has flared again after a member of a parliamentary watchdog called for an official investigation.

The call from John Robertson MP, who sits on the energy and climate change select committee, came as the number of people signing a petition against npower rose above 167,000.

"The taxman should establish an urgent inquiry to get to the bottom of how npower have got away with paying no tax despite making hundreds of millions of pounds in profits," said Robertson, a long-term campaigner over fuel poverty. "If npower aren't tax dodging, what possible reason can there be for a business in Britain paying money to a German company via Malta?"

 Npower admitted to his committee two weeks ago that it had paid almost no corporation tax for three years but explained that was because it could write off profits against the huge power station investments it was making.

The argument blew up again this week when German-owned n power admitted money was moving via a company it owned in Malta and revelations that the former boss of n power, Volker Beckers, was working as a non-executive director for HM Revenue and Customs.

But the company denied that the use of its Maltese financing subsidiary, Scaris Ltd, was designed to avoid paying tax in Britain and was just a way of borrowing cash to fund British investment "more efficiently."

Paul Massara, chief executive of npower, said: "The use of Malta in making payments on our financing made no difference to our UK tax contributions. Npower has not, and will not, engage in tax avoidance. Our corporation tax bill was low between 2009 and 2011 because we made losses in our retail business and invested billions into the UK."

But Richard Murphy, an accountant who runs a consultancy called Tax Research, said it remained unclear why RWE, npower's parent company, would lend money to its UK business via Malta "unless tax avoidance was its motive. The tax saving that results is very clear."

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Article source : http://www.guardian.co.uk