Vodafone avoids £1bn UK tax bill, say reports
HMRC has missed out, while tax authorities in Germany, Spain and elsewhere have gained
By CFOWorld staff | CFO UK | Published 15:16, 26 June 12
Vodafone has reduced its UK tax bill by at least £1 billion for the past decade, according to Reuters research into the mobile phone company’s statutory filings across Europe.
The past 16 years’s worth of filings made by Vodafone across Europe showed HM Revenue & Customs has missed out, while tax authorities in Germany, Spain and elsewhere have raked in billions of euros, Reuters said.
Indeed, rather than incurring UK tax in recent years, Vodafone has racked up tax credits such that it may not have to pay any tax on its UK operations for the foreseeable future.
Vodafone's low UK tax bill is in spite of soaring revenues here and the fact that chief executive Vittorio Colao has repeatedly told investors that Britain was one of the group's stronger performing markets.
"This is yet another tax scandal," said MP Margaret Hodge, chair of the influential cross-party public accounts committee, which scrutinises public expenditure and revenue-raising, Reuters reported.
"It may be legal, but it's completely immoral. They make money out of Britain, and they should put money back into Britain."
Vodafone declined to comment on its accounts, citing commercial sensitivity. It said it was committed to acting with integrity and transparency in all tax matters, while also having a responsibility to shareholders to control tax costs.
There is no suggestion the company has behaved unlawfully, and arranging its affairs in a tax-efficient manner within the law is standard business practice.
HMRC, which MPs last year accused of being "too cosy" with big business, the Treasury and Vodafone Limited's auditor Deloitte told Reuters they could not comment on individual companies' tax affairs.
Tax avoidance is already at the top of the political agenda. Last week prime minister David Cameron publicly criticised comedian Jimmy Carr for being "morally wrong" to shelter £3.3 million of income from tax by using an apparently legal tax avoidance scheme called K2.
Tax campaigners say the tough approach to individuals avoiding tax contrasts with a lax approach toward corporations doing the same.
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