Vodafone prevails in £2bn UK tax spat
HMRC to appeal
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Vodafone has won a key ruling in its long-running battle with the UK government over a disputed £2.2bn tax bill.
A UK judge last week sided with the cellco's argument that Her Majesty's Revenue and Customs was not entitled under EU law to make it pay the difference in corporate tax between the UK and another European country with a lower tax rate.
In other words, the UK's Controlled Foreign Companies (CFC) Act, of 1988, designed to stamp out tax domicile-shopping, is illegal within the EU as it now stands.
Vodafone triggered the CFC tax bill by buying German rival Mannesmann in 2000, through a Luxembourg holding company.
According to accountancy firms, Mr Justice Evans-Lombe's ruling is a landmark judgment, affecting thousands of companies, which have paid hundreds of millions of pounds a year.
According to reports, the judge called on Parliament to spell out the tax consequences for companies that set up a controlled foreign company in another EU country.
With so much at stake, HMRC will appeal the ruling. ®
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COMMENTS
evasion, escape
to misquote..
"It is every pounds duty to try and escape [the tax man]"
Bad losers
"HMRC will appeal the ruling"
And spend yet more money, which they collected from everyone else!
HMRC should go after the real tax evaders.
If I claim too much for mileage or subsistence, the tax man is on my back. If I claim any other expenses they have to be fully itemised above a very low limit or again the Tax man cometh. My mum retired as a teacher and they pursued her even after her death just in case she had any extra income they hadn't known about for the previous 40 years.
It is about time that HMRC went after the real Tax Evaders and they should start at Westminster.
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