Energy giant Npower has rejected fresh claims that it is avoiding its tax obligations in the UK following a report that it has shifted millions in profit to Malta. It has denied it dodged paying up to £108 million in UK corporation tax in the past four years — by funnelling cash to Malta.

More than half of the firm’s funding comes from German owner RWE via loans paid through a shell company based in Malta, The Sun claimed.

Npower then pays back annual interest on the loans to the Maltese company — called Scaris.

The arrangement means the UK gas and electricity supplier can post a loss in the UK, and avoid corporation tax.

Experts have likened Npower to the US coffee chain Starbucks, which dodged UK tax using similar sister firms.

Tax specialist Richard Murphy said: “Npower has shifted millions of profit to Malta — that can only be to save tax. If that isn’t tax avoidance I don’t know what is.”

Npower reported a 34 per cent rise in profits to 413 million pounds last year

The company admitted earlier last month that it has not paid corporation tax in the UK for three years, arguing that it has invested "billions" in new power stations and wind technology.

But a report in The Sun claims that it has avoided paying up to £108 million in UK corporation tax in the past four years with the use of a Maltese company called Scaris.

The revelations will pile pressure on Npower, which in 2010 managed to find £21 million for a three-year deal to sponsor the Football League.

And they will infuriate the company’s near seven million customers who are receiving record bills.

Despite the tax dodge, Npower insists it has done “nothing wrong” and HM Revenue & Customs was “aware of everything”. But lobby group 38 Degrees demanded meetings with the firm.

Its chief David Babbs blasted: “Npower has been rumbled. By shifting this money through Malta, they avoid millions of pounds of tax.

"This is cash we sorely need to bring down the deficit and fund schools and hospitals.

"They claim it’s above board, but why else would they funnel profits made in the UK through a Maltese tax haven?”

RWE has paid about £2.3 billion in loans to Npower via Scaris since 2008, accounts show.

Expert Mr Murphy claimed Npower would have paid tax on nearly £400 million of profits since that year if it had not made interest payments to Malta.

But £463 million went to Scaris and other RWE firms over that period.

Mr Murphy said Scaris probably pays the money it gets from Npower back to RWE in the form of a dividend — which escapes tax in Germany.

A spokesman for RWE Npower confirmed it worked with the Malta company "for a couple of years" until 2011, adding: "I can categorically state that this makes no difference to our UK tax situation."

He added: "All of the ways in which we manage our tax is approved by HMRC. I can confirm that all of our UK activity is taxed in the UK and we pay all the taxes due. The reason it has been modest in the last few years is that we have invested around £5 billion in the UK."

MPs were already angry with Npower after its boss, Paul Massara, admitted two weeks ago the firm hadn’t paid corporation tax for three years.

He blamed its huge investment in wind farms — which gets a tax credit.

He then told a select committee the firm borrowed some cash from its German parent RWE but insisted it was “standard business practice”. There was no mention of Scaris.

On Tuesday Npower said: “HMRC are aware of everything here and still class us as a low-risk company. It’s sad to see this continued harrying of a company like ours that has invested billions into the UK.”