CONCERNS Wightlink has not paid any corporation tax — despite chalking up profits of almost £22 million last year and paying shareholders £14 million — have been raised by the Isle of Wight's MP.

Bob Seely, who has called on the ferry companies to provide a 'public service' to Isle of Wight residents, has written to Wightlink chief executive, Keith Greenfield, asking questions about its corporate structure and offshore holdings.

Wightlink's annual report reveals it has not paid any UK corporation tax on its profits in the last two years.

Although there are a number of possible explanations for this — companies are entitled to offset significant investments against their tax bill, for example, and Wightlink spent £45 million on its new Victoria of Wight ferry — Mr Greenfield declined to offer any such explanation when contacted by the County Press.

Mr Seely said in his letter, copied to treasury and transport ministers: "Wightlink appears to pay no tax on its earnings. Equally, the holding companies do not seem to pay any tax either.

"Wightlink appears to be making a good profit paying shareholders — a dividend of £14 million. When would Wightlink or its shareholders expect to start paying UK tax on its earnings?

"Wightlink’s immediate holding company, Arca Top Co, while registered in the UK, is controlled from Luxembourg and its parent company is registered in Guernsey.

"If this is correct, why is Wightlink’s corporate structure offshore? Has this structure been put in place to minimise tax liabilities?

"What benefit is there for the Island in this arrangement? What benefit is there for the UK taxpayer?

"If Wightlink was sold and took on more debt, would it have to make even more profit to pay its shareholders?"

In response, a Wightlink spokesperson said: "We have received Mr Seely's letter and will respond in due course."

Following news Mayfair Equity Partners, the firm behind Yo Sushi restaurants was planning a takeover of Wightlink, Mr Seely said he would not support its sale to another 'asset sweating' company.

Sky News reported this week Mayfair was one of a small number of bidders in talks about a deal.

As previously reported, Wightlink could be sold for £300 million — significantly more than the rumoured £230 million current owner Basalt Infrastructure Partners paid three years ago, when it bought the firm from Australian bank Macquarie.

According to Sky News, the Wightlink sale could be agreed in the coming weeks, although it is more likely the deal will be closed early next year.

Mr Seely has called on the government to ensure a public-service obligation is included in any deal — which could include forcing the ferry company to run extra services at cheaper fares.

He said to Mr Greenfield: "I understand a buyout firm is amongst the frontrunners to purchase the company. If this organisation takes the same attitude as previous owners and seeks to asset-sweat Wightlink rather than develop a long-term plan, I will be opposing the sale and highlighting my reasons for doing with the new owners and with government.

"What assurances will you give that any new owners will act in a responsible way and see Wightlink as a vital public service?

"Prices for the business seem remarkably inflated. I assume this is due to profit forecasts which make Wightlink highly attractive, that it is in effect a duopoly and, if you live in some parts of the Island, an effective monopoly.

"Wightlink’s possible sale seems a good opportunity to highlight a number of issues that concern me about Wightlink’s social responsibility in relation to your profits and corporate structure.

"I appreciate what you and your management team have been trying to do in forming a better relationship with the Island. My issue is not with you, or your team, but with the owners and the ownership structures."

UPDATE 15:16: A Wightlink spokesperson said: "No corporation tax has fallen due for Wightlink as a result of the high levels of investment it makes in building new ferries and improving facilities for customers. This applies to any company which reinvests its profits to renew its assets.

"Wightlink has recently invested £45million in its new flagship Victoria of Wight and modernising port infrastructure on the Portsmouth to Fishbourne route.

"Wightlink makes and declares all its profits within the UK."