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Oct 29

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29/10/2010 11:13  RssIcon

Protestors storm Vodafone in London over unpaid £6bn tax bill

Protestors forced a Vodafone store on Oxford Road, London to close last Wednesday (27th September) as part of a campaign targeting the company due to having allegedly avoided £6bn in taxes.


The protestors staged a sit-in of the premises and were involved in scuffles with Police as they attempted to remove them from the shop. One officer was clearly seen striking a protestor who was sat down, just moments after saying "we are doing this for your own safety".

Amid a background of cuts to benefits and the welfare state, they carried banners brandishing the company's logo with accusations of 'tax dodgers' and and the demand 'pay your taxes, save our welfare state'.

One of the group said in an interview: "A simple [solution] is just getting everyone to pay their fair share, and that means the corporations stop dodging tax".

While it is claimed that Vodafone owe £6bn, the facts of the case however remain obscure, with HRMC refusing to release in the public domain the full details of the deal it struck with Vodafone over outstanding tax debts. The episode dates back to 2000, when Vodafone bought out a German engineering company for €180m. In order to avoid paying UK taxes, they created a subsidiary company in Luxembourg - where profits would be taxed at less than 1% - through which to make the purchase. However this was deemed to break anti-tax avoidance rules and after negotiations the tax liability was set at £1.25bn. although it was suggested they had put aside a further £2.2bn to cover this.

The negotiations came under fire as it transpired that the head of the Vodafone tax team was a former senior official at HRMC, where he worked with the officer responsible Dave Hartnett.

The protestors also critised the government's decision to cut a quarter of funding to HRMC, which they say will render it "toothless" and unable to effectively claw back tax from corporations.

Recently the government have also faced scrutiny for their close ties with Vodafone, George Osborne recently spent taxpayer's money on promoting the company whilst on a trip to India.

Commentators say that the move by HRMC is simply reflective of the government's pro-business approach to taxation, which will see the rate of corporation tax drop from 28% to 24%. According to tax analysist Richard Murphy, director of Tax Research LLP, the effective rate of tax - in order words what they will actually pay after taking into account legal loopholes and sophisticated means of avoidance - will fall to a mere 17%. This figure is less than VAT (to rise to 20%), income tax (lowest band is 20%) and small business tax.


You can see a map of where protests are taking place over the weekend here.

 Visit the Uncut facebook page here.


Check out our mobile phone Buyers Guide here.





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