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By (user no longer on site)
over a year ago
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"was it a break in or a deliberate protest against alleged tax avoidance?
Coincidentally, April's GQ magazine carries an apology to Vodaphone for accusations made in Jan 2011 edition about Vodaphone not paying tax and that parts of V's UK business were based Luxembourg."
I only know what i'd read online,there does some to be some differing views but what I read was
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The story first originated in the current affairs magazine Private Eye (1273, 3-16 Sept, 2010) and then spread to other outlets.
The issue started when Vodafone bought the German engineering company Mannesmann a decade ago for €180bn, using an offshore company in Luxembourg. Private Eye says:
An epic legal battle began, with Vodafone resisting the taxman’s efforts to get all the information on the deal and arguing through the courts that the British laws striking out the tax benefits of its deal were neutered by European law which granted, Vodafone claimed, the freedom to establish anywhere in the EU (including its dodgiest tax havens) without facing a tax bill.
The battle continued until last year when the HM Revenue & Customs’ (HMRC) head Dave Hartnett, known to be “friendly” to big multinationals, moved the case to a department more willing to cut a deal.
The fruits of these talks, conducted without consulting HMRC’s litigators and specialists in the tax law concerned on the chance of success in the courts, was a bill for Vodafone of £800m, with another £450m payable over five years and, remarkably, an agreement that the arrangement can carry on into the future with a promise of no challenge from HMRC. The Eye understands that the settlement also swept up several other Vodafone tax avoidance schemes.
The amount of money forgone is estimated to be £6 billion.
Vodafone owe money not just to the UK taxpayer but also in India, where a court rejected their appeal (reg. reqd.) and asked them to pay $2 billion in tax for buying an Indian company. The charity Action Aid says that money could feed lots of starving people in India.
But the HMRC said it was an ‘urban myth‘?
One former Revenue & Customs official familiar with the case told Private Eye it was an “unbelievable cave-in”.
The man who negotiated on behalf of Vodafone for its tax settlement – John Connors – had worked at HMRC until April 2007. When Vodafone hired him, he simply moved to the other side of the negotiating table on this matter.
As Richard Murphy said at the Guardian, days after it was announced, Osborne was promoting Vodafone in India – a visit that must have been agreed before the tax announcement was made on 23 July.
Forbes magazine blog also says there is a lot that doesn’t sit right with the issue.
The settlement also signalled a “more conciliatory approach” at the HMRC, said the Financial Times in July, and coincided with Chancellor George Osborne’s pledge to make Britain “open for business”. Osborne said the rules, demanding multinationals are more transparent about their tax structures, added too much red tape.
The watered down deal allows the HMRC to claim ‘success’ at wringing something out of Vodafone at least. No wonder they want to dismiss this as an ‘urban myth’. |