Vodaphone billions unclear - still dodgers though

Icon_article Star-blue1 Published: October 30, 2010 15:39 by Ivan Agenda

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Vodafone have been targeted throughout the country in a successful shut down of their high street stores. 

The protest focussed on the £6 billion debt owed in tax, which was cut by unelected chancellor Osbourne. However, the £6 billion is a dubious figure which we should be careful to bandy about. There are however, many reasons still to shut them down. 

 

For fiscal (financial) year 2010 Vodafone reported profit before taxation of £87 billion and in the same period 2009 it reported 4.2 billion. Yet it had a £56 million pound tax credit in 2010 and a £1.1 billion tax credit 2009.

 

Why is a company making 9 billion in profit, paying no tax and in fact getting a tax credit?

 

Bear in mind these are global figures. UK profit accounted for 7% of global profit in 2010.

 

According to Vodafone's annual report 2010, it provisioned against £2.2 billion "in respect of the potential UK corporation tax exposure" at 31 March 2010. The question is why a company would provision against £2.2 billion when the HMRC ultimately charged them only £1.25 billion? 

 

Add to that the tax avoidance efforts of ploughing huge profits into Luxembourg in order to avoid tax and their cozying mission to India and there is enough reason to target them. All I would question is the £6 billion figure. 

 

56% of pre-paid users in the UK switched contract in the last year. Why not add to the percentage?

Additions

Consumerism isn't the answer

Comment Published: October 31, 2010 00:20 by -

Good article... except for

"56% of pre-paid users in the UK switched contract in the last year. Why not add to the percentage?"

Because it just means choosing from a particularly small selection of companies. They're all big corporations who dodge tax and do all the other nasty crap that big capitalist corps do. The airwaves/networks are after all a huge infrastructure and require a shared space - so they are government monopoly no matter what they try to do (or pretend to do) and who do they choose to run them?

Better to stand outside Vodafone and highlight the inequity of the situation to more people than swapping one bunch of shits for the other.

Tax Allowances

Comment Published: October 31, 2010 23:27 by Cardano

Most Multinationals make a tax provision and overestimate it. This is then lodged with the taxing authority and interest is paid. When the Taxing Authority compiles the final liability, the balance is returned to Corporate Control. It depends what arrangement exists between the Tax Authority and the Company but that can mean they Tax give them a cheque or the Company release funds from an escrow account. Either way it is not only Vodafone that do it.

The use of accounting vehicles to place profits into different jurisdictions ensures that a Multinational can minimise tax paid by paying tax in diffent jurisdictions. What is needed is a unitary taxation regime so that £78Bn Profits is taxed accordingly. (78Bn should attract about £23Bn tax, by the way).