Brian Wilson, Yorkshire's finance director, said the measure in Kenneth Clarke's last budget in November would ultimately raise the company's tax bill by pounds 7m a year and amounted to a disguised windfall tax. The proposals reduce the value of tax allowances for long-term investment, hitting utility building programmes particularly hard, and would raise up to pounds 1bn by the end of the decade.
Yorkshire's submission to the Labour Government on the windfall tax has included a request for the Treasury to abolish the tax changes.
"It was widely hailed as quasi windfall tax. We don't want to be hit twice," said Mr Wilson.
Brandon Gough, the chairman, played down the possible impact of the windfall tax on customer prices. "It would be an exaggeration to say the windfall tax would have a significant impact on prices," he said.
Yorkshire revealed it had spent a further pounds 110m on the aftermath of the 1995 drought crisis which forced the company to bring water into areas with a fleet of 700 tankers at a cost of pounds 33m. The new investment went to build a water grid to link up with Northumbrian Water.
The group ended a week of water company results with a 33 per cent rise in pre-tax profits in the year to the end of March to pounds 215.8m. Yorkshire raised its dividend by 19.4 per cent. Underlying profits, excluding pounds 47m of exceptional drought costs in 1995, rose by 3.1 per cent.Reuse content