Feeds

Vodafone's small, controversial tax bill validated by UK.gov

See that cell tower? That's actually in Switzerland

Beginner's guide to SSL certificates

The National Audit Office, asked to look into Vodafone's negotiated tax bill of £1.25bn, has decided it was a reasonable deal considering the cost of taking legal action against the company.

Back in 2010 Vodafone was accused of owing £6bn in tax, and the company had reserved £2.2bn to meet it's UK tax obligations, but George Osborne struck a deal to accept £1.25bn. That sparked national protests, and in December last year the Audit Office was asked to take a look at five deals including the one struck with Vodafone. It has now concluded that all were perfectly reasonable.

The report (pdf, surprisingly readable, but still very dull) doesn't name the companies, but Vodafone admits to being "Company D" whose deal is criticised as breaking the Treasury Department's own guidelines though it concludes that this is because the guidelines themselves aren't very good.

"Litigation and Settlement Strategy" lays out how the 'Department negotiates deals, and specifically prohibits "split the difference" deals where the liability party is asked to pay a mid point between the maximum liability and the minimum. In Vodafone's case that minimum was zero, as the company claimed it owed nothing at all:

"The agreed settlement ... was lower than the tax liability that would have been paid if the Department won in litigation. Given the uncertainties and costs of litigation, it was reasonable for the Department to settle at the amount it did" says the report. Later Sir Andrew Park, consultant to the NAO, went further:

"Sir Andrew Park considered that there may have been a sense in which the settlement [with Vodafone] could be characterised as ‘splitting the difference’, but his view is that, if this is the case, it is the strategy that is at fault rather than the settlement."

So if the guidelines were broken then it's because they aren't very good guidelines, obviously.

Vodafone, of course, can barely conceal its glee at the report:

For more than a year, Vodafone has been falsely accused of improper conduct ... the National Audit Office has now concluded that the outcome was good for the UK taxpayer. We welcome this vindication.

Not only that, but Vodafone points out that in addition to paying its legally-mandated tax it also handed £6.7bn to shareholders this year to the benefit of the UK economy - if you're not a shareholder then you only have yourself to blame.

All large companies avoid paying tax, if they didn't then we could have much lower tax rates for ourselves, but the tricks being applied are getting increasingly complicated - to the point where it's almost impossible for tax offices, let alone ordinary citizens, to understand who must pay what. A recent investigation by The Bureau of Investigative Journalism, working with Private Eye magazine, found a Vodafone office in Switzerland staffed by one part-time employee who admitted he didn't go into the Vodafone room very often.

None of this is illegal, and neither, it seems, was Vodafone's deal with the Revenue: repugnant as that might all be to those of without barely staffed international offices in tax havens. ®

Remote control for virtualized desktops

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Big Content outs piracy hotbeds: São Paulo, Beijing ... TORONTO?
MPAA calls Canadians a bunch of bootlegging movie thieves
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
Hungary's internet tax cannot be allowed to set a precedent, says EC
More protests planned against giga-tariff for Tuesday evening
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.
Website security in corporate America
Find out how you rank among other IT managers testing your website's vulnerabilities.