United Utilities has gained Fair Tax Mark accreditation, a scheme which recognises organisations which are transparent in their financial reporting.
The North West water supplier, which pays around £240 million in tax per year, has improved the tax notes in its financial statements and has now supplemented this with a detailed report setting out what tax it pays and why, both in the UK and abroad.
Furthermore, the company has also enhanced its tax policy, and begun confirming annual compliance.
Several other companies in the utilities sector can also claim the accreditation.
These include big six energy supplier SSE, Co-Op Energy, Affinity Water and Pennon Group which owns South West Water.
Paul Monaghan, chief executive of Fair Tax Mark, said: “Some aspects of utilities are natural monopolies, so it is right and proper that businesses in this sector are held to the highest standards of transparency and responsible tax conduct.
“The vast majority of businesses that have secured the Fair Tax Mark have made substantive changes to secure accreditation: be that a new public tax policy, significantly enhanced tax reporting, the onshoring of economic activity or the closure of subsidiaries connected to tax havens.
“We look forward to working with more utility companies in the year ahead and encourage those in the sector to talk to us about the process of Fair Tax Mark certification.”
Russ Houlden, chief financial officer at United Utilities, said: “Each year United Utilities contributes around £240 million to public finances and we are fully committed to paying our fair share of tax and acting in an open and transparent manner in relation to our tax affairs.
“We are constantly looking at ways to further improve the communication and transparency of our approach to tax and we are very pleased to receive this independent certification from the Fair Tax Mark.”
In recent years water companies, as in other sectors, have come under fire for the way they conduct themselves financially.
Last year then environment secretary Michael Gove delivered a barbed message to companies with interests in the Cayman Islands, at Water UK’s annual City Conference.
Rounding on those with complex offshore multiple subsidiaries and their slow progress at scrapping them, he said: “The stated reason was to enable smoother access to global bond markets.
“But the rules were changed and yet the offshore firms continue to exist. The companies concerned have maintained the structures that enable them, among other things, to avoid proper scrutiny. And scrutiny matters, because these companies have used their complex structures to play the system.”