HomeBusinessWater firms Thames, Yorkshire and Southern pay NO tax

Water firms Thames, Yorkshire and Southern pay NO tax


Revealed: Three British water firms that pay NO tax – our investigation shows foreign owned Thames, Yorkshire and Southern avoid business levy

  • The three companies forked out a total of £1.4billion to service massive debts
  • This wiped out their profits and therefore their corporation tax liabilities
  • Water firms under fire for pumping raw sewage into rivers and coastal waters 


Three of Britain’s biggest water companies paid no corporation tax last year, an investigation by The Mail on Sunday can reveal. 

Our findings that they failed to contribute a penny of the business tax to the Treasury’s coffers will infuriate critics at a time when water firms are under fire for pumping raw sewage into rivers and coastal waters. 

Thames Water, Yorkshire Water and Southern Water – controlled by wealthy overseas investors and foreign Governments – have been repeatedly accused of polluting bathing water and causing catastrophic damage to wildlife. Critics have demanded the overhaul of a ‘broken’ system that allows water giants to build up vast debts and siphon billions of pounds out of the country. 

Leaking money: Thames, Yorkshire and Southern forked out a total of £1.4billion to service massive debts and satisfy other charges linked to their complex financial structures

Our probe discovered that the three companies forked out a total of £1.4billion to service massive debts and satisfy other charges linked to their complex financial structures. 

This resulted in the wiping out of their profits and therefore of their corporation tax liabilities. The tax is only charged on companies that are in the black. 

The three firms were singled out for criticism four years ago when Michael Gove, then Environment Secretary, complained that they made ‘particularly keen use of sophisticated financial engineering’ to reduce their tax burden while enriching their shareholders. 

The Mail on Sunday revealed in November that nine water companies had amassed debts of more than £50billion despite being privatised in the 1990s free of borrowings. Thames, Yorkshire and Southern are responsible for half of that figure. A separate report earlier last month said a total of £72billion had been extracted by the owners of the companies in dividends and other payments. 

The Public Accounts Committee has said there is a ‘serious risk’ that parts of England – particularly London and the South East – will run out of water in 20 years. Major investment will be required to repair leaking supply networks, as well as importing water into the worst hit regions and building reservoirs. 

Feargal Sharkey, the pop star turned campaigner for clean rivers, said: ‘What we have with these companies is smoke and mirrors. They have made off with £72billion and we’ve ended up with rivers full of sewage. They are out of control. 

‘A lack of investment means parts of the South East are running out of water. Someone is going to have to start spending huge amounts of money. 

But with £50billion of debt sitting on the balance sheet, they can’t afford to finance that. So the taxpayer gets screwed and our environment has been devastated. Who is picking up the bill for that?’ 

Sharkey, who is chairman of Hertfordshire’s Amwell Magna Fishery, the oldest fly-fishing club in England, called for urgent action from the Government and regulator Ofwat to bring the companies into line. He also demanded that 30 per cent of each privately owned water company is returned to the stock market to improve transparency over their financial affairs. 

Southern’s biggest shareholders include Australian fund Macquarie, which is known as the ‘vampire kangaroo’ for squeezing billions of pounds in dividends from Thames Water, which it owned between 2006 and 2017. The company made a loss of £350million on revenues of almost £785million last year. 

The owners of Thames now include funds controlled by the Abu Dhabi and Kuwaiti governments. Its parent company, Kemble Water Holdings, reported revenue of £2billion and a loss of £370million. 

Yorkshire Water is owned by foreign sovereign wealth funds including GIC Special Investments, controlled by the Singapore government. Kelda Holdings, its parent company, reported revenue of £1.1billion and a loss of £152million. 

Each of the water firms paid tax through National Insurance contributions, VAT and other taxes and is investing heavily in infrastructure. They argue the low-tax structure helps keep bills low. 

Thames said: ‘We have an unprecedented amount of investment directed towards safeguarding our rivers and streams. Between 2020 and 2025 we are spending £1.25billion on maintaining and improving our operational sites.’ 

A statement on Yorkshire Water’s website said it has ‘not been required to pay any corporation tax in recent years’. The company said it paid £148million in other taxes last year.

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