Vodafone in £1-bn UK tax tangle
The world’s largest mobile phone company, Vodafone Group, has shaved £1 billion, and possibly more, off the taxes its UK operating unit might have paid in the past decade, thanks to accounting factors not seen at other European units.business Updated: Jun 26, 2012 22:26 IST
The world’s largest mobile phone company, Vodafone Group, has shaved £1 billion, and possibly more, off the taxes its UK operating unit might have paid in the past decade, thanks to accounting factors not seen at other European units.
A Reuters examination of statutory filings made by Vodafone across Europe over the past 16 years shows the UK taxman has often gone empty handed, while tax authorities in Germany, Spain and elsewhere have raked in billions of euros.
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 member of parliament Margaret Hodge, chair of the parliamentary public accounts committee, which scrutinises public expenditure and revenue-raising. “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 answer most questions about 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. “Paying more than was required would be a dereliction of duty to shareholders," said Robin Bienenstock, research analyst at Sanford C Bernstein in London.
First Published: Jun 26, 2012 22:24 IST