Revelations that Britain's largest water companies avoided millions of pounds in tax last year are a "scandal of monumental proportions" and a classic case of private firms "fleecing the public," it was claimed today.
Thames Water and Anglian Water did not pay a penny in corporation tax last year while Yorkshire Water paid only £2.9 million despite all three making profits of over £300m.
The three firms, all of whose parent companies are based in Jersey, are the latest to have their complex financial arrangements exposed that allows them to avoids taxes while generating vast profits and rewarding their owners.
Thames Water received a £76m tax rebate in 2012 despite operating profits of £643.9m. CEO Martin Baggs received a bonus of £418,359 on top of his £425,000 salary, a joint investigation by Lib Dem MP Simon Hughes and the Observer found.
The company has also paid out £1.08 billion in dividends over the last four years.
Anglian Water paid no corporation tax in the 2011-2012 financial year despite profits of £492m and paying £478m in dividends to investors this year.
Yorkshire Water, which made a profit of £303m, paid only £2.9m in corporation tax.
The revelations will provoke particular fury with the taxpayer as the water firms join a long list of profit-driven companies, including Starbucks, Google and Amazon, using complex schemes to avoid tax.
John Christensen of Tax Justice Network told the Star: "This is a scandal of monumental proportions. Everything about this case is designed to make the public furious.
"This is a classic case of major private equity companies, banks and investors taking advantage of a monopoly network to fleece the public while paying themselves huge sums of money.
"The public should be furious. This shows everything that was wrong about the privatisation scheme in the first place."
Anglian and Thames both deny tax avoidance, saying rather that the tax has been "deferred."