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Thames Water defers corporation tax 'for a decade'

Thames Water, the UK's biggest water company, does not expect to pay any more corporation tax for up to a decade, it said, as an above-inflation rise in bills saw its profits rise by nearly a fifth.

Thames Water to defer liability tax Credit: Thames Water

The firm says its infrastructure investments of £1 billion a year over the next seven to 10 years mean it will be able to defer £20 million a year in tax liabilities.

The firm, which is at loggerheads with regulator Ofwat over customer charges, has already built up a deferred tax bill of £855.6 million and its latest plans will see this rise to more than £1 billion.

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Ofwat: Thames' extra bill increase was not justified

Water regulator Ofwat has rejected a bid by Thames Water for an additional price hike for 2014 to 2015 of 8%.

We said we would challenge Thames' application, in the interests of customers. We did just that and on the evidence provided we are not convinced that an extra bill increase is justified.

– Ofwat's chief regulation officer Sonia Brown
  1. National

Ofwat rejects Thames Water's bid for 8% bill rise

Water regulator Ofwat has turned down Thames Water's application for an additional price increase for 2014 to 2015.

The water regulator Ofwat has ruled Thames Water's price hike must remain at 1.4% above inflation. Credit: Press Association

Ofwat says it was for Thames Water to justify the proposed 8% increase was in customers’ interests.

Within the three month timescale for assessing the application, the water regulator found the evidence the company submitted did not justify its proposed £29 additional increase in customers' bills.

Ofwat’s decision means the maximum that Thames can add to customers’ bills for 2014-15 is still 1.4% above inflation, as set in the 2009 price review.

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Customers can monitor bills for 2 years before switching

Thames Water say its impossible to generalise about whether a family will be better or worse off on a meter Credit: Chris Radburn/PA Archive

Thames Water say its not possible to generalise about whether a family would be better or worse off on a meter.

The company says that customers won't be moved on to a metered account until two years after the new system has been activated. During that time they will still be able to monitor their usage on a daily basis and get price comparison bills before switch-over.

Work out how your bills may change here.

Thames Water customers can find out more information about metering here.

Thames Water hopes metered customers will value water more and use less

Thames Water want 100% of its customers to be on meters by 2030 Credit: Ian Nicholson/PA Wire

Around 30% of Thames Water customers are on meters and the company wants that to be 100% by 2030, starting in Bexley.

Thames Water says it hopes the scheme will encourage its customers to be more water-efficient. It says the new technology allows customers to monitor what they use and research shows metered customers tend to use water more sparingly.

It says London has less rainfall than Istanbul, only half as much as Sydney, yet one of the highest individual levels of water consumption in the UK.

Offences included working without permit

Thames Water were fined for the following offences:

  • Euston Road - for breach of permit conditions: £1,600
  • Millbank - for working without a permit and three failures to notify offences: £5,600
  • Camberwell New Road - for breach of permit conditions and a failure to notify offence: £3,200
  • Upper Clapton Road - for breach of permit conditions and a failure to notify offence: £3,200

£13,600 bill for nine offences

The water company was fined £13,600 for nine offences earlier this year Credit: Thames Water

Westminster Magistrate’s Court fined Thames Water £13,600 following a guilty plea to nine offences in four locations earlier this year.

The prosecution is the latest in a series of successful prosecutions by Transport for London in its bid to reduce unnecessary roadworks and improve traffic flow.

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