Li Ka-shing's British power firm UKPN under fire over alleged tax avoidance
UK Power Networks allegedly reduced tax bill with payments to firms in the Cayman Islands
A British energy firm owned by tycoon Li Ka-shing has come under fire amid allegations the company, at the centre of a storm over Christmas power blackouts, avoided paying millions of pounds in taxes.
UK Power Networks (UKPN) is alleged to have avoided an estimated £38 million (HK$485 million) in British taxes over the past three years by paying £164.4 million via the Cayman Islands to firms controlled by Li, Asia’s richest man.
The claim, made by a British newspaper yesterday, came as thousands of UKPN customers in the southeast of England continued to endure the holidays without electricity and heating after storms brought down power lines nearly a week ago.
“UK Power Networks fully complies with all applicable regulatory, tax and legal requirements relevant to a group operating in the UK,” a UKPN spokesman said yesterday. The British government has been called upon to close the loopholes in corporate tax laws that are being used by the country’s utility firms and other companies to reduce tax bills.
More than 30 were recently cited as paying more than £2 billion to their overseas owners every year as interest on borrowings. Interest payments on borrowings may be deducted from a company’s taxable income.
A Revenue and Customs spokesman said the use of loopholes within tax law was legal. “That said, we will investigate any company, foreign- or UK-owned, where we believe the use of those loopholes goes beyond tax avoidance and becomes tax evasion.”
