HMRC do deal with Vodafone to help with tax avoidance

8 September 2010

Bitterwallet - VodafoneOh dear. Silly Vodafone. When they're not irritating just about everyone in the world, prompting us to tell you just how to cancel your contract with them, they're hiding money in foreign countries and costing us money. Nice.

See, Vodafone bought a German engineering company called Mannesmann for €180bn so it could use it to avoid paying tax, claim Private Eye. This move could have fallen foul of British anti-tax avoidance laws, so to avoid any fuss, they got in touch with Her Majesty's Purse Holder and thought everything would be just fine. However, the Inland Revenue pretty much told them to piss off.

Not that this stopped Vodafone. They went about dumping their profits into the company and... well... a rather large legal battle ensued. The result was that tax inspectors went about trying to retrieve some money to go back into our tax system. However, HM Revenue & Customs’ (HMRC) Dave Hartnett decided to move the case from his specialists and lawyers to find nicer, gentler people to negotiate with Vodafone’s head of tax, John Connors.

What happened was that Vodafone were billed for £800m - a move that was decided without consulting HMRC’s litigators and specialists in the tax law. The best additional agreement was that these dodgy arrangements could carry on into the future with a promise of no challenge from HMRC.

Basically, this move from Hartnett seems to be encouraging tax avoidance, leaving the likes of us lot sold well short. Other big companies must be rubbing their hands with glee over this.

TOPICS:   Investments   Tax   Economy


  • David d.
    What? THE John Connors?
  • bushbrother
    First they over charge a whole bunch of us, now they undercharge these guys ... cheers HMRC!
  • Daniel Z.
  • WTF
  • Andrew
    That sounds about right for the HMRC. They knew they would never win the court case because of their utter incompetence. This happens with plenty more companies and individuals...
  • The B.
    A government department buggering up royally? No! Never! Any whiff of the word incompetence and the following things will happen: 1) The spin doctors will be called in. 2) It will be buried underneath other "news". 3) The unions will take exception to government workers being called inept and strike.
  • plop
    £6 billion quid that could have gone to the government. And they're busy cutting funding to save that kind of money. Wouldn't need to slash any budgets if they actually went after all the money companies owe, which I read somewhere was in the region of £15 billion a year. They could build a fucking golden palace in every town with that cash and still have enough left over to clean Tory MPs moats.
  • Cheesy
    And lets not forget Rupert Murdoch with News International, Sky et al - it's estimated that his companies paid around 6% tax on their colossal profits, nothing remotely illegal and no question of tax evasion you understand, just clever and perfectly legal accounting procedures enabling tax evasion... Particularly ironic given that some of his more popular titles rail against 'grasping' immigrants who come over to this country and 'bleed us dry'. Much simpler to concentrate on castigating so called benefit cheats, pitting us against each other and slashing public services so that ultimately the poorest and most vulnerable of us pay the price. All the time this is going on we're looking the other way and letting the richest companies and individuals literally rip us all off.
  • Paul
    @Cheesy That might aswell be poetry cheesy very well written! You have absolutly got the nail on the head, full stop end of story. What a sick sick world....

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