Energy giant nPower has admitted paying no UK corporation tax for three years despite making £766million in profits.
The revelation emerged yesterday during fierce questioning of the company's chief executive by MPs.
NPower joins Amazon, Google and Starbucks in coming under fire for making millions in Britain while contributing little to the Treasury's coffers.
The company's average dual fuel bill has risen by £257 in just two years – leaving households facing punishing annual payments of £1,352.
In theory, the £766million profits for the period 2009 to 2011 could have generated a tax bill of £200million rather than staying wholly with German parent company RWE and its shareholders.
Ian Lavery, a Labour MP, suggested several of the 'big six' power firms were paying less corporation tax than they should – with nPower the worst offender.
Paul Massara, who heads the firm, admitted it had paid no corporation tax in the three years.
However, he insisted the situation was perfectly acceptable because nPower had put the cost of building wind farms against its tax liability.
Mr Lavery said he was amazed by this and customers would struggle to understand such a 'surprising' explanation.
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Fellow Labour MP John Robertson said: 'Everyone watching these proceedings will be absolutely shocked that you are willing to stand up and say we deserve not to pay tax. If I said that, I would be crucified.
The firm in part blamed investment in wind farms for its failure to pay corporation tax to the UK Treasury (file picture)
'You have used the rules to suit yourself. I am glad I don't get my energy from you, if I did I would be switching as soon as I left this room, I am so annoyed about it.'
Rise: nPower's UK profits have increased and so have average household fuel bills
Mr Massara replied: 'We have invested £5billion in the last five years building power plants, creating jobs, creating employment and helping to keep the lights on.
'There is no mystery to it, there is no desire not to pay tax. The fact is you are allowed depreciation for your investments. And we have been the biggest investor by a mile in the renewable offshore business.
'If we had not made that investment, we would not have the (tax) deductibility that we would be allowed. That is a simple UK accounting rule.'
Mr Massara said the only way the UK will get the £110billion of investment needed in new power supplies by 2020 will be through tax breaks for energy firms.
Energy bosses were giving evidence to an inquiry into prices, profit and poverty by the energy and climate change select committee.
MPs blasted SSE, which was recently fined £10.5million for signing up thousands of customers on the basis of misleading information.
The firm revealed it made around £45 a year from each of the estimated 23,000 customers affected by mis-selling.
Alistair Phillips-Davies, the firm's deputy chief executive, apologised and said the company had changed its training and audit procedures to correct the problem. Centrica, which owns British Gas, paid £1.5billion in corporation tax over the period in which nPower paid nothing.
Last year npower increased gas bills by 8.8 per cent and electricity prices by 9.1 per cent
Protestors picketed Starbucks chains across the country, including this one in Exeter, after it admitted paying little or no company tax
After the evidence session, Mr Lavery said: 'In the last three years RWE nPower have reported profits totalling £766 million – yet today they admitted they have not paid a single penny of corporation tax over that period.
'People who pay their taxes unquestioningly are sick and tired of seeing hugely profitable companies use every trick in the book to get out of contributing their fair share.
'Hard-pressed families struggling with sky-high energy bills will be absolutely astonished that an energy company which makes hundreds of millions in profits doesn't appear to be paying its fair share in tax.'