Home >> Tax News >> Protestors close Vodafone shop over tax bill
Added 29 October 2012
Although Vodafone themselves have confirmed the store will remain closed until ‘it is safe to reopen’ they have disputed the claim that there is an unpaid tax bill of £6 billion.
A spokesman for the firm has said that although there had been negotiations between themselves and HMRC, they stated they do not know where the huge figure has come from.
One activist, Chris Coltrane, tweeted directly from the protest “Vodafone have dodged £6bn tax. That would have paid for almost all the welfare cuts. We’re shutting down their flagship store.”
Protestors have been seen outside the store carrying banners bearing the Vodafone logo and reading “Pay your taxes. Save our welfare state.”
Vodafone finally settled a long-running battle with HMRC in July of this year after agreeing to pay £1.2 billion, despite making provisions for a £2.2 billion bill.
It is believed the bill related to Controlled Foreign Companies (CFC) liabilities which apply to firms controlled by UK residents but which pay tax at a lower rate on earnings abroad.
At the time Vodafone said “Vodafone will pay £1.25 billion to settle all outstanding CFC issues from 2001 to date and has also reached agreement that no further UK CFC tax liabilities will arise in the near future under current legislation.”
The trouble occurring today at Vodafone’s store however seems to have stemmed from an article in Private Eye magazine which estimated that the actual amount of tax lost ‘was likely to be at least £6bn’.
According to the article, a former official who was familiar with the case described the settlement as an ‘unbelievable cave-in’ by HMRC.
Although on the surface it seems as though a monstrous amount of tax has remained unpaid by the mobile phone giants, it is not rare for HMRC to agree settlements to put an end to tax feuds.
It may be wise to remember that although, seemingly, there is an additional £4.8bn still unpaid that had HMRC continued with legal battles against the firm and lost then no tax would have been paid and the cost to the taxpayers for the legal bills would have been astonishing.
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