As the Manchester Evening News, and others, has reported, the House of Commons Energy and Climate Change Committee has issued a report that highlights undermined trust in energy market over profits. As the Scotsman noted:
Sir Robert Smith, Liberal Democrat MP for West Aberdeenshire and Kincardine, and speaking on behalf of the committee, said: “At a time when many people are struggling with the rising costs of energy, consumers need reassurance that the profits being made by the ‘big six' are not excessive.
“Unfortunately, the complex vertically integrated structure of these companies means that working out exactly how their profits are made requires forensic accountants.
“Ofgem should shine a brighter light on the internal structure of these big companies.”
Andrew Wright, Ofgem's new chief executive, was heavily criticised by committee chairman Tim Yeo in May after he ruled out forcing energy companies to be more transparent about their profits, claiming it would be “expensive and intrusive” to implement such legislation.
Why note this? Because it is an obvious outcome of the campaign I was involved with for 38 Degrees on Npower that highlighted these issues and that Ofgem's approach to disclosure in this sector is woefully inadequate and candidly misleading.
The time for reform is now.
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Just read the 38 degrees blog link for first time. Interesting they pay interest to Malta.
I seem to recall that Malta used to have some form of remittance basis of taxation in some circumstances (I know becasue it was the basis of some ‘tax planning’ I helped implement some time ago – funnily enough when I worked in the electricty industry … but not NPower I hasten to add).
What that meant was if you had an offshore account then the income paid into that offshore account wasn’t taxed in Malta until and if it was remitted to a Maltese/onshore account. Very useful if you want to avoid tax!
Don’t know if that option is still avilable in Malta but it suggests to me that Scalaris is likely to pay a very low rate of tax and your estimate of 5% to 10% could be high.