RWE Npower Attacked by U.K. Lawmakers for Limiting Tax Payments

RWE Npower Plc was attacked by U.K. lawmakers for not paying corporation tax in the last three fiscal years, after the energy company said it is allowed to reduce its tax liability because of its investments.

Lawmakers on the cross-party Energy Committee of the House of Commons asked Npower Chief Executive Officer Paul Massara to confirm whether the company had paid the tax in the last three years. Opposition Labour Party lawmaker Ian Lavery said he was “amazed” to learn it had not.

“We will not pay corporation tax in those three years and that is for the simple reason that effectively we have invested 5 billion pounds in the last five years,” Massara said during the parliamentary hearing today in London. “That is a simple accounting U.K. rule. There is no mystery to it. There is no desire to not pay tax.”

Western nations, seeking to shrink budget deficits, are looking for ways to raise more money from companies to placate voters squeezed by falling living standards and cuts to public spending. Energy companies this week were criticized by the industry watchdog for charging consumers too much. Inc. was among three U.S. companies that last year were singled out by U.K. lawmakers for not paying enough tax in Britain. Members of Parliament’s Public Accounts Committee criticized the online retailer, Starbucks Inc. and Google Inc. for using complex accounting methods to reduce their tax liabilities in the U.K.