Energy firm hits back at Malta tax dodge claims

The company admitted earlier this month that it has not paid corporation tax in the UK for three years, arguing that it has invested “billions” in new power stations and wind technology.

But The Sun claims that it has avoided paying up to £108m in UK corporation tax in the past four years with the use of a Maltese company called Scaris.

The report claims that more than half of the firm’s funding comes from German owner RWE via loans paid through Scaris, a shell company in the Mediterranean tax haven, allowing Npower to return annual interest on the loans. The arrangement means the UK gas and electricity supplier can post a loss here, and avoid tax.

A spokesman for RWE Npower confirmed it worked with the Malta company “for a couple of years” until 2011, adding: “I can categorically state that this makes no difference to our UK tax situation.”

He added: “All of the ways in which we manage our tax is approved by HMRC.

“I can confirm that all of our UK activity is taxed in the UK and we pay all the taxes due. The reason it has been modest in the last few years is that we have invested around £5bn in the UK.”

Npower increased gas prices by 8.8 per cent and electricity by 9.1% in November. The company reported a 34 per cent rise in profits to £413m last year.