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npower faces customer anger as petition calls for full payment of taxes

Campaign compares energy company's tax affairs to Starbucks', but company says its accounts are completely in order

npower's 6.5 million customers face an average energy bill of £1,188 a year after price hike

Around 80,000 people have called on RWE npower to "stop tax dodging", signing up to an online petition within 24 hours of its launch by campaign group 38 Degrees.

Around 14,000 of the signatories indicated they were customers of the German-owned energy provider and many warned they planned to switch to another supplier unless the company changed its accounting policies.

The petition, which refers to npower "acting like Starbucks", was launched in the aftermath of admissions by the group that it had paid no corporation tax in three years.

The revelations about npower, one of the UK's big six suppliers, were made public on Tuesday at an energy and climate change select committee hearing, after being revealed earlier in a letter to the shadow energy secretary, Caroline Flint.

npower said it had written off the tax against the multibillion-pound investments it had made in building new power infrastructure but David Babbs, executive director of 38 Degrees, said the campaign against it was concentrating on an alleged £180m of "interest payments" paid to its parent company. This he believed was a way of avoiding tax similar to the "royalty payments" made by Starbucks, which caused a political row and sparked public demonstrations against the coffee shop chain last year.

38 Degrees, set up and chaired by former Body Shop co-founder Gordon Roddick, has 1.2 million members and a strong record of successful campaigns. It was part of the campaign against Starbucks and masterminded another that forced the government to abandon its attempt to sell off national forests.

"The news of yet another huge company like npower dodging tax stinks, and not just because it comes at a time when our gas and electricity bills are going through the roof," says the 38 Degrees online campaign material. "By dodging tax, npower are actively contributing to the UK's deficit – and to the stinging impact of government cuts. Let's force npower to stop using accounting tricks to dodge their fair share of tax. Sign the petition to npower now," it goes on.

The campaign was given impetus by support from Richard Murphy, a crusading accountant who runs Tax Research UK and who argued npower's actions were not ethical.

He said: "This is the Starbucks, Google and Amazon stories all over again. Everything is legal, of course, but the profits have moved location. And they clearly have in this case. npower is not an unprofitable business, overall. Far from it, in fact."

But the energy company defended its practices, saying they were perfectly normal. "This is not an 'accounting scam'. Like almost every company in the UK, our business is financed by a mixture of equity and loan capital – this is standard business practice," it said in a statement.

"We do borrow from our parent company, RWE – this is because the interest rates we pay to RWE Group are the same as, or often lower, than we would pay to a UK bank. This is not only perfectly legal, and something HMRC [the UK tax authorities] is fully aware of – it is common practice."

Npower also pointed out that since 2008, RWE had invested around £5bn in the UK, including the construction of two new gas-fired power stations and wind farms. It added: "We've not paid corporation tax because we've been investing hundreds of millions to keep the UK's lights on."

http://www.guardian.co.uk/business/2013 ... x-petition

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