HMRC do deal with Vodafone to help with tax avoidance
Oh 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.