TaxCorporate TaxEnergy companies hit by tax loophole closure

Energy companies hit by tax loophole closure

The Treasury closes down loophole that allowed energy companies to claim reliefs on expenses already paid for by customers

Energy companies hit by tax loophole closure

A LOOPHOLE allowing energy distribution companies to claim a collective £900m in tax reliefs for expenses already paid for by business customers has been closed down by the chancellor.

The legislation, which takes immediate effect, will primarily affect gas and electricity providers, and will prevent them from making new claims to historical costs that have already been paid by business clients.

George Osborne said the practice is completely unacceptable, with the utility companies claiming £50m using the method since January.

“The government is committed to competitive taxes to support growth in the UK,” Osborne said.

“But it is also only right that companies pay the tax they owe. It is completely unacceptable that utility companies think they can claim for huge amounts of money, that business customers have already covered the cost for.

“By legislating today, we will prevent utility companies from making these claims, ensuring fairness for British taxpayers.”

HM Revenue & Customs is to continue to challenge claims made by the companies unless they withdraw their applications.

Related Articles

‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

1m Emma Smith, Managing Editor
OTS report: Corporation tax should follow accounts

Corporate Tax OTS report: Corporation tax should follow accounts

3m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

4m Emma Smith, Managing Editor
HMRC nets £2.6bn in corporate tax from big businesses

Corporate Tax HMRC nets £2.6bn in corporate tax from big businesses

9m Accountancy Age editorial
Tax crackdown brings in £468m for HMRC

Corporate Tax Tax crackdown brings in £468m for HMRC

9m Accountancy Age editorial
Q&A with the Financial Secretary to the Treasury

Corporate Tax Q&A with the Financial Secretary to the Treasury

4m Emma Smith, Managing Editor
Spring Budget 2017: Making Tax Digital

Business Regulation Spring Budget 2017: Making Tax Digital

7m Shereen Ali, Deputy Editor
Tax fraud loses HMRC £16bn

Corporate Tax Tax fraud loses HMRC £16bn

8m Emma Smith, Managing Editor