Affinity Water, the UK’s largest water only supplier, has today (8 March) secured Fair Tax Mark accreditation, following its successful review against the Fair Tax Mark criteria.
With the legitimacy of utilities being called into question and a revived call for water and electricity networks to be put back into public ownership, greater transparency of financial structures and tax strategies is now an important focus for the industry.
Affinity joins fellow utilities SSE and Pennon Group, the parent company of South West Water, as businesses to receive the mark.
The Fair Tax Mark is given to organisations that demonstrate “they are paying the right amount of corporation tax in the right place, at the right time.”
The UK’s water industry has been criticised in the past year for having complex financial structures. Environment secretary Michael Gove accused some companies as appearing to be “intent on financial engineering just as much as real engineering”.
As part of the accreditation process Affinity Water has improved its tax reporting, bolstered its tax strategy and progressed closure of an offshore finance subsidiary in the Cayman Islands.
Stuart Ledger, chief financial officer at Affinity Water, said: “We are really pleased to have been awarded the Fair Tax Mark certification, meeting the very high standard required to achieve this accreditation.
“As a community focused company, we understand the expectations of customers and stakeholders to pay our fair share of tax. Today’s award recognises this, and the steps we have taken to improve the transparency of our tax affairs. It is good corporate responsibility to operate in this way. Our activities are and have always been fully taxable in the UK.”
Paul Monaghan, chief executive of Fair Tax Mark said Affinity Water and its parent company Daiwater Investment Ltd have worked hard over the past year to build and demonstrate their responsible tax conduct.
He said: “At a time when the public is growing used to headlines about big corporates shifting profits to tax havens and minimising the contributions they make to the public purse, it’s refreshing to see a business that is proud to say what they pay.
“It’s particularly heartening to see that a small but increasing number of utilities companies are taking these issues more seriously and leading the way on tax.
“Many aspects of utilities provision are natural monopolies, with customers having little choice as to who supplies them. This brings with it significant profit opportunities for business, but also the responsibility to pay a fair share of tax on those profits.”
The Fair Tax Mark certification scheme was launched in February 2014 to allow businesses that are paying tax in a responsible way to demonstrate this commitment to their customers, suppliers, investors and employees.
Fair Tax Week 2019, which will run from 6 to 14 July will be co-sponsored by Pennon Group and SSE.
Susan Davy, chief financial officer at Pennon Group, said: “The UK would not be the country it is without the tax contributions of business of all sizes, operating in all sectors. The attitude towards payment of taxes of a few companies has been a factor in a loss of public confidence in big business and we hope that Fair Tax Week can play a part in winning that trust back.”
Gregor Alexander, finance director at SSE, added: “Utilities provide an essential service and it’s only right they hold themselves to high standards and we’re delighted to be co-sponsoring Fair Tax Week with Pennon, the most recent FTSE company to join the growing list of businesses placing importance on tax transparency.”