The British Gas owner Centrica is preparing to fight a legal battle to keep a £6 million tax refund awarded to the company in 2011, it’s reported.
Back in 2005 the Valuations Office Agency (VOA) set the business rates for gas-fired power stations in England and Wales but the owners of all 30 plants appealed against the decision.
Centrica’s Peterborough plant (pictured) initially faced an annual tax bill of £1 million but after the supplier won a tribunal hearing in 2011 it was slashed to a mere £1 per year, back dated to 2005. It meant the firm was in line to receive a £6 million refund.
However, the VOA has appealed to the upper tribunal and Centrica is now gearing up to fight its corner once again. A spokesman for Centrica said the higher rate was excessive as the plant has barely turned a profit since 2005.
The owners of 17 of the 30 gas-fired plants have already cut deals with the tax authorities over the business rates paid for the power stations, the Telegraph reported.
The result of the appeal could have implications for the tax bills for the remaining plants, which include the rest of Centrica’s gas fleet. The firm’s spokesman said Peterborough had been selected by the VOA as a test case.
The VOA said it was unable to comment on individual cases.
The website of Dalton Warner Davis, Centrica’s lawyers for the appeal, said: “Work is being supported by companies owning around half the gas-fired electricity generating capacity in England and Wales.”