Vodafone paid no corporation tax in the UK last year.
Vodafone claims it paid lost of other taxes here. In fact it says it paid £338 million - more than the £294 million of profit it made in the UK.
Well, with the greatest of respect to Vodafone, the fact I pay my council tax, road fund licence, VAT and national insurance does not let me off paying my income tax. But that's what Vodafone's trying to argue.
And politely, it's utter nonsense.
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Er – isn’t this to do with the issue of claiming tax allowances for the £5bn for the 3G spectrum etc. Capital allowances as allowed by law and available to all companies?
As I’ve said elsewhere – that’s one explanation
There are others
What others?
Perhaps shifting just sufficient profits (by one device or another) into the UK perhaps from Germany or another EU country) to be sheltered by the capital allowances here? Hence the corporation tax avoided is not UK tax but perhaps German corporation tax?
http://www.vodafone.com/content/dam/vodafone/investors/factsheet/group_factsheet.pdf
Alternatively profits perhaps could have been shifted from India? The following story make reference to a Mauritian group company.
http://www.tax-news.com/news/Vodafone_In_New_Indian_Tax_Dispute____59657.html
The reason for no UK corporate taxes is, the the tax deduction for loan financing on the UK 3G and 4G spectrum which reduces the £294m figure you quote as that is operating profit not profit before tax on which the tax computation is based.
They can legitimately take a deduction for these financing expenses both within the letter and spirit of the law just like every other company in the land. So, to use your analogy, they are claiming tax deductible expense just like you but it so happens they’ve spent quite a bit more than you have.
Do you always take explanations at face value?
Do you always assume they must be incorrect? Not might be, but must be?
I use evidence
What evidence? May the rest of us see it?
£5bn amortised over say 20 years would give you a £250m deduction every year, which takes you fairly close to break-even even before you look at any other capital allowances; and as J Ledbetter says the interest costs on financing that spectrum cost would bring it down even further.
I agree that the bit about “we also pay VAT, PAYE<, NI, etc" is an annoying red herring.
Indeed. VAT is not actually paid by companies – they are merely a conduit for collecting it from their customers and passing it to the Exchequer -and to include this as part of their contribution to the national revenue is very misleading.